House super panel cites possible market manipulation

The House of Representatives Quinta Committee, also known as the “Murang Pagkain” Super Committee, ordered the National Bureau of Investigation to probe the alleged market manipulation that has kept rice prices high.

Albay Rep. Joey Sarte Salceda, chair of the House committee on ways and means, likewise asked the Bureau of Internal Revenue to look into the filings and tax payments of top rice importers, following allegations of profiteering in the domestic rice trade.

This as the National Economic and Development Authority disclosed that lowered tariff on imported rice from 35 percent to 15 percent did not lead to a reduction in rice prices.

“This is a puzzle also for us. Perhaps this deserves a more nuanced analysis,” NEDA Director Nieva Natural told the House committee Tuesday.

The motion of the super committee, forwarded by House Deputy Majority Leader and Iloilo 1st District Rep. Janette Garin, sought to identify individuals and organizations responsible for significant mark-ups in the rice supply chain.

“Allow me to put forward a motion to direct the [NBI] to investigate —from the retailers to the middleman to the wholesalers—so we can specifically identify the responsible people in terms of price manipulation,” Garin said.

Cavite Rep. Lani Mercado-Revilla seconded the motion, which was approved by Salceda, lead chair of the super panel.

Garin’s motion followed a presentation by the Philippine Competition Commission outlining vulnerabilities in the rice supply chain, particularly among vertically integrated entities and middlemen.

In her interpellation, Garin pressed Agriculture Secretary Francisco Tiu Laurel Jr. to clarify which agency is responsible for monitoring the middlemen in the rice market.

Laurel admitted that no agency is specifically tasked with monitoring middlemen, highlighting the regulatory gaps that allow manipulative practices to persist unchecked.

Despite tariff reductions intended to make rice more affordable, retail prices remain high, ranging from P55 to P60 per kilo.

Garin said some middlemen exploited their control over access to legitimate wholesalers, inflating prices further.

Government data showed the tariff reductions have resulted in P13.3 billion in foregone revenues, which lawmakers suspect may have ended up benefiting rice importers and traders instead of lowering retail prices.

Salceda, for his part, said the BIR should step in.

“Congress cannot request tax filings. They are protected by Section 270 of the Tax Code. But the BIR can verify their own assessments and records. These top importers are importing in the billions. So, their tax payments should reflect that,” he said.

Salceda added a charge of tax evasion would then allow the Anti Money Laundering Council to look into top importers’ transactions, “as tax evasion is a predicate offense that would allow AMLC to look deeper.”

“Around the time of the President’s rice price ceiling, the gap between landed import price and domestic retail price was just 3 pesos per kilo. Now it has swelled to 20 pesos per kilo, even as farmgate price also went down.”

“This is just short of being supernatural. There is clearly pricing abuse— we just need to pinpoint at which stage,” Salceda said.

Finance Secretary Ralph Recto said he supports the ongoing investigation of the House Quinta committee.

“The government is focused on bringing down rice prices,” Recto said.

For its part, the Philippine Rice Industry Stakeholders Movement (PRISM) urged the government to provide clearer guidance on rice importation, citing concerns that traders are importing high-cost varieties with little regard for the broader consumer base, which relies on affordable rice.

PRISM co-founder Orlando Manuntag said the expected reduction of P5 to P6 per kilogram in rice prices, following the tariff reduction, has not been realized.

Manuntag attributed the “insignificant price drop” to the type of rice being imported.

From January to December 2024, 74 percent of the 4.3 million metric tons (MT) of imported rice that arrived were premium varieties, primarily whole grain, which are significantly more expensive, he said.

Only a small fraction consisted of well-milled or broken rice—varieties intended to lower prices for consumers.

“The law mandates that at least 25 percent of imports should be well-milled or broken rice, but this regulation was not enforced. As a result, importers prioritized premium rice, keeping market prices elevated,” Manuntag explained.

To address the issue, Manuntag called on the government to enforce regulations requiring a mandatory allocation of at least 10 percent of imports for well-milled and broken rice.

“World market prices are already decreasing, and with proper coordination, we can make rice more affordable for Filipino families,” he said.

Currently, 80 percent of the country’s rice imports come from Vietnam, with smaller quantities sourced from Thailand, Myanmar, Pakistan, and India.

In the local market, premium rice is priced between P48.50 and P52 per kilogram, well-milled rice ranges from P42 to P45, and broken rice is sold at P38 to P40.

“We support the President’s rice initiative, but we need more retailers to offer rice at P40 to P42 per kilogram. Affordable rice should be readily available without unnecessary hassle for consumers,” Manuntag said.

As this developed, Philippine Chamber of Agriculture and Food Inc. (PCAFI) on Wednesday said rice traders are to blame for the high retail prices of the staple grain despite the reduction in tariffs.

In an interview with Manila Standard, PCAFI president Danilo Fausto said the reduction of tariffs only seem to benefit “middlemen” as they do not pass the savings on to consumers.

He said possible hoarding may be exacerbating rice supply pressures arising from El Niño and La Niña, which put a strain on rice production in 2024.

“We suggest that the government import rice on a government-to-government basis, with India as the source. This would be an effective strategy for bringing down the retail price [of rice] in a hurry,” Fausto said.