That the Asian Development Bank has lowered its growth forecast for the Philippines for the next two years came as no surprise. We were half expecting that not only from the ADB but from some other institutions which in recent weeks have been busy catching up with the rise and fall of the price and supply of our basic staple —rice—and the Bangko Sentral’s adjustments to ensure that the exchange rate of the peso versus the dollar stays within bounds.
In its 2018 Update Report, Kelly Bird, ADB’s Country Director for the Philippines, blamed “slower agricultural output, lower net exports as imports surge and higher inflation”as conspiring to downgrade the country’s growth in the face of a volatile global economic environment. By its reckoning, ADB said that the country will grow by only 6.4 percent for 2018 lower than its earlier forecast of 6.8 percent. By 2019, the rate would hover around 6.7 percent against an earlier projection of 6.9 percent.
To be fair, Bird noted that despite this downgrade, the country’s economic fundamentals remain strong highlighted by an increase in investments and public spending with the roll out of the administration’s Build, Build, Build centerpiece development platform.
Of course, what Bird did not say was the breakdown of the higher inflation rate. Contrary to the voodoo economics of the opposition and their allies, the spike in inflation can be attributed primarily to higher prices of rice, gasoline and other basic necessities such as fish and vegetables as well as power and water. Rice accounts for roughly 30 percent of the consumer price index while gasoline and transport should register 10-15 percent. The prices of these items are more likely to be on the upswing unless government steadies up its own counter measures to keep things within bounds.
The case of rice should be instructive. Being our basic staple, it has figured in many of the causes of any administration’s fall from grace for as long as one can remember. Previously, lack of supply due to slower agricultural production was the main culprit. When the National Food Authority (NFA) was created by then President Marcos in the 1970s, it became embroiled in the problem. Originally established to assure the country of buffer stock and ensure availability of rice at survival prices, the actions of the NFA have been embedded with the annual debates on rice and food security up to this day. It has also become the barometer for the public standing of any administration. In fact, this agency has had a number of predecessors and have had to change names every so often to set it apart from the sins of the past.
In 1960, then-candidate Diosdado Macapagal lambasted the incumbent President Carlos Garcia for the scandals abounding at the then NAMARCO which was charged with issuing permits and financing for rice and corn trading. He won. Then, in the 1965 elections, then-candidate Ferdinand Marcos did the same thing to the sitting President Macapagal with his National Grains Authority (NGA) and went on to win. He even got re-elected. Then, due to the problems at the rice and corn trading agency, immediately after the declaration of martial law, the NFA was established with a vaster and more improved mandate. And so we are back to the same problem of rice and its availability with the same results—a black eye on the administration.
Then President Cory Aquino lost her goodwill not only because she was the “Queen of Darkness”—due to the brownouts caused by the undue haste with which she dismantled the country’s energy program and its infrastructure and ceded the same to the private sector at the expense of consumers—but also because of the agrarian reform, agricultural productivity and food security issues essentially centered on rice.
Cory’s successor, Fidel Ramos, was no better. Under FVR, people had to line up for their daily rice buy, if available at ‘survival’ prices and with a three-kilo limit. The problem was the running battles between and among the Department of Agriculture (DA), NFA and the private sector. Then as now, the DA under Secretary Roberto Sebastian wanted to import just 300,000 metric tons while the NFA Council wanted to import 700,000 tons. The same happened during the Estrada, Macapagal-Arroyo and Noynoy administrations. In the latter’s case, while they were able to hold off a lot of scare as they flooded the markets with imported rice, the last straw was when security forces shot at people calling for the opening of the NFA warehouse in Kidapawan City so they could get their daily buy. People were killed and the administration got hammered for incompetence and insensitivity.
Given the impact and sensitivity of the rice issue it will be unfortunate if President Duterte and his crew fail to respond to the cries of the masses for rice, not unli, but sufficient and reasonably priced.