SONA: Asan ang food?

To deliver his third and best State of the Nation Address (SONA), President Ferdinand Romualdez Marcos Jr. walked for 65 seconds through a virtual gauntlet all by his lonesome self, only to emerge seemingly victorious into the cheers and applause of the 2,000-strong bejeweled crowd inside the cavernous session hall of suburban House of Representatives, on Monday, July 22.

The walk-through was also a metaphor for loneliness of leadership at the top, where the buck stops.

Grim-faced and unsmiling, the gladiator in Marcos Jr. went straight to tackling the monster of the moment – food security and its grating consequence, high inflation.

“Whatever current data proudly bannering our country as among the best-performing in Asia means nothing to a Filipino who is confronted by the price of rice at 45 to 65 pesos per kilo,” he declared. Remarkable candor.

At P58.86 per dollar, a P65 rice is $1.10 per kilo. More than 15 million Filipinos struggle on $1 a day income, which cannot buy a kilo of rice.

In 2024, from a 5.5 percent growth in 2023, the Philippine economy is forecast by experts to grow 6.2 percent, the highest in ASEAN’s ten countries and the second highest in Asia. This statistic, while good, Marcos sneered, “means nothing to our countrymen faced with high prices of goods, especially food, rice in particular.” Remarkable candor.

But then the President put the blame on several factors, except his government – market forces, war in Ukraine and Hamas, climate change and El Niño (after La Niña in March) which, he said, other countries also suffer from. Previously, he had blamed “smugglers, hoarders and price manipulators” for record-high rice prices that began rising in September.

“I feel your burden,” Marcos told his countrymen, “I cannot ignore your pain and suffering.”

The high price of rice is the main reason why inflation – the rate of increase in prices of basic goods – tripled, from 2.4 percent in 2020 to 7.2 percent in first half 2023, during the first year of the Marcos II presidency.

The high inflation in turn triggered a five-fold increase in the barometer (of cost of money), the 91-day T-bill rate, from 1.11 percent in 2021 to 5.40 percent, resulting in more costly production of goods and services and business failures, which cascaded into job losses.

Marcos’s solution to high rice prices: produce more rice. Indeed, palay output last year, he exulted, reached 20 million tons, the highest since 1987 (applause). This translates into just 13 million tons of rice, short by three million of the 16-million-ton annual demand for the staple. So imports must be resorted to, said the President.

Reports say Manila will import over four million tons of rice this year (4.7 million tons, according to the US government), up from the record 3.6 million tons imported in 2023, which made the Philippines the world’s largest rice importer.

“We continue to support the agricultural sector,” the President assured. In the last ten years, agriculture’s share of total economic production or GDP fell 30 percent, from 13.1 percent to less than 10 percent, equivalent to a loss of at least P1 trillion worth of food output yearly.

A rice or food shortage for Filipinos seems ironic. The Philippines has two of the best rice institutes in the world, the International Rice Research Institute in Los Baños, Laguna and the Philippine Rice Institute in Nueva Ecija. Filipinos taught other countries how to grow rice. And now we import rice in huge volumes from these countries.

You need five elements to produce enough rice: seeds, water, land, good weather and an able-bodied farmer. In all five, the Philippines comes short.

Little has been heard of new breakthrough rice varieties like the hybrid that propelled Masagana 99 rice boom under Marcos I, outside of new varieties that require plenty of chemical-based fertilizer, irrigation, no flooding and yet poison the soil after several plantings.

Even with new so-called popular rice varieties developed by IRRI and PhilRice, yields are not that spectacular, four tons per hectare on average in 29 of the country’s 82 provinces, and at very high cost. China does six to 12 tons per hectare. Production cost per kilo is as high as P20, triple that of Thailand and Vietnam, thanks to higher hired Filipino labor and expensive fertilizer and electricity.

The Philippines has plenty of rainfall (20 typhoons a year) but not enough of it irrigates rice farms. Of the 4.8 million hectares planted with rice, only 3.29 million hectares are irrigated, leaving 1.51 million dependent on rainfall. Irrigation doubles, even triples rice yields; so instead of getting three tons per hectare, you should get six to eight tons.

Average rice landholding per farmer is 1.8 hectares. Land reform subdivided otherwise productive huge tracts of land, which were denied economies of scale and modernization. It also resulted in higher land rent. Today, the Filipino farmer, along with the fisherman, is the poorest Filipino.

The Philippines has 2.9 million rice farmers; at 60, all are aging and losing strength.

On June 20, 2024, President Marcos cut the tariff on rice, from 35 percent, to 15 percent.

EO 62 is to ensure the continuous supply of goods, temper inflation and protect the purchasing power of Filipinos, which modified the rates of import duty on various products, including rice.

Marcos said, “The tariff rates shall be subject to periodic review, with the Most-Favored Nation tariff rates for rice subject to review every four months to ensure the responsiveness of our policies to prevailing economic conditions. Meanwhile, consistent with the government’s thrust to devote more resources to the agricultural sector, the tariff revenue collection from rice imports will be utilized to strengthen government efforts to boost the productivity and competitiveness of local rice producers.”

*      *      *

Email: [email protected]