Piñol to economic team: Get out of air-conditioned offices, see reality

MANILA, Philippines – "Perhaps, it is best for some economists to look beyond the graph and get out of their air-conditioned offices to see reality."

Ex-agriculture secretary Emmanuel Piñol delivered one more swipe at the government's economic team, blaming his colleagues in the Duterte Cabinet for the disproportionate farmgate and retail rice prices in the market.

In a Facebook post, Piñol insinuated that the economic team just relied on theory in pushing for the rice tariffication law.

He threw shade at the economic team just two days before his appointment as chairman of the Mindanao Development Authority. (READ: Piñol not popular among Bangsamoro people – BTA chief Murad)

The law liberalized rice imports so that there would be more affordable rice in the market. It protects local farmers through a higher rice import tariff of 35%, as well as a loan fund for farmers.

However, experts have noted that while rice prices have been declining, they have not dipped as fast as local palay farmgate prices. This places local farmers at a disadvantage, as imported rice varieties are much cheaper.

Farmgate palay prices as of July stood at P17.80, 17.6% lower than the P21.59 recorded during the same period in 2018.

The retail price of regular milled rice was at P35.26, just 9.2% lower than the P38.85 a year ago.

"One economist projected that with an abundance of rice supply in the market, prices would fall to as low as P27 per kilo," Piñol added.

While Piñol did not name the economist he was referring to, Socioeconomic Planning Secretary Ernesto Pernia and other officials were quoted several times by the media about rice prices.

Piñol, who was viewed as a weak link by some Cabinet members because of the dismal growth in agriculture, implied that the economic team thought that rice was the same as fruits. (READ: Economic managers pressure Piñol to curb soaring inflation)

Currently, prices of lanzones, mangosteen, durian, and rambutan have dropped by almost 70% because of abundant supply. Piñol said fruit farmers are not complaining because they understand that they need to immediately sell the highly perishable goods.

Unlike fruits, rice can be kept for a much longer time and may be hoarded.

"This is the perfect example of the economic theory that when there is an abundance of supply, prices will drop. Perhaps, this was the same theory that was in the mind of the economists when they proposed and succeeded in flooding the market with imported rice," Piñol said.

"They should not be obstinate and show humility by admitting that not all economic theories work in the real world," he added.

The Department of Agriculture as well as other government agencies are tasked to ensure healthy market competition and ensure that hoarding does not take place.

The Senate agriculture committee was set to assess the impact of the rice tariffication law on Wednesday, August 7, but its hearing will be moved to a later date. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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