The implementation by the Department of Agriculture (DA) of a maximum suggested retail price (MSRP) on imported rice has resulted in a sharp reduction in prices without significantly disrupting the rice industry.
Before the DA introduced the MSRP in early February, imported rice with 5 percent broken grains was being retailed at around P64 per kilo, despite softer global prices, tariff reductions, and a stronger peso. The Philippines Statistics Authority recognized the MSRP as a crucial factor in bringing down rice prices and helping tame inflation, with March print surprisingly lower than market and central bank expectations.
The MSRP initiative debuted at P58 per kilo, and in less than a month, by March 1, the DA had reduced it further to P49 per kilo.
Agriculture Secretary Francisco P. Tiu Laurel Jr. suggested that the MSRP might be lowered again before the end of March if global rice prices continue to soften and the peso maintains its appreciation against the US dollar. “If the current trend in world rice prices persists and the peso remains strong, we might lower the MSRP for imported rice to around P45 per kilo by March 31,” he said.
The introduction of the MSRP followed consultations with industry stakeholders to ensure that price reductions wouldn’t shock the rice industry or jeopardize food security. This initiative sought to fully reflect the decision of President Ferdinand Marcos Jr.’s approval of a reduction in rice tariffs from 35 percent to 15 percent, effective July 2024. By September last year, India lifted its year-long ban on the export of non-basmati rice, contributing to a global supply increase.
As a result, rice prices have dropped to their lowest levels in over two years, with some rice varieties quoted below USD400 per metric ton.
Secretary Tiu Laurel noted that the landed cost of good-quality rice variety from Vietnam—those with 5 percent broken grains—has dropped to around USD490 per metric ton, more than USD200 cheaper than in November 2024 and approximately USD80 less than early January prices.
Meanwhile, the Philippine peso regained strength in early March after trading above P58 against the US dollar since November. Data from the Bangko Sentral ng Pilipinas (BSP) showed that the peso was weakest in November, sliding to briefly to P59 and averaged P58.6947 to USD1 during the month. As of March 11, the peso has strengthened to PHP 57.225 per US dollar.
Secretary Tiu Laurel reassured the public that falling rice prices and lower tariffs would not impact the PHP 30 billion annual budget allocated to the Rice Competitiveness Enhancement Fund (RCEF), which supports local rice farmers under the amended Rice Tariffication Law (RTL). He emphasized that during deliberations for the new RTL, the government ensured there would be a provision to sustain the RCEF through the General Appropriations Act starting in 2026.
The expanded RCEF, funded by rice tariff collections from the previous year, will continue for six years, running through 2031, to support the competitiveness of local rice farmers in the global market. ### (Photo by DA-AFID)
