By Robert B. Roque, Jr.
While the government claims to be fighting hoarders and price manipulators, the ones truly caught in the crossfire are the rice retailers, the farmers, and the ordinary citizens struggling to put food on their tables.
And when economics meets reality, the rice retailers are feeling the heat of the price cap imposed by the Marcos administration. A slapping P7,500 a day – that’s the cost of this policy to them, and many feel it’s 7,500 reasons to be disgruntled. That’s not petty cash, as this adds up to a staggering P49,000 weekly.
Adding insult to injury, the administration justifies the spike in rice prices due to supposed hoarding and price manipulation. The National Economic and Development Authority (NEDA) is singing praises for this price cap, implying that the high rice prices are really all part of a sinister plot.
Maybe it is.
But what are you doing, Finance Secretary Ben Diokno, supporting this boo-boo of price controls? Diokno claims it’s a short-term remedy against market players engaging in non-competitive practices. Mr. Diokno, sometimes a short-term fix can lead to long-term pain.
Or perhaps you’ve aged to develop a short-term memory loss to forget what economic theory teaches: setting mandatory price caps would generate increased demand and decreased supply, leading to a shortage.
Economists are shaking their heads in dismay. Finance Undersecretary Cielo Magno, whose post on Facebook alludes to the President’s flawed decision to impose the rice price cap, has raised brows. Insiders say she was asked to resign for posting a simple chart of the law of supply and demand.
But while this is all a harmless academic discussion that apparently this administration couldn’t take being educated. It’s an affront to a Wharton-bred Chief Executive! That might have been why he did not consult his economic team before dropping the price control bomb. Even Diokno swore he was surprised!
What could be the real agenda here?
A more than witty trade official dropped a hint: maybe, just maybe, this whole price cap charade is a setup for something else. How about opening the floodgates for rice imports? Lowering tariffs and letting foreign rice flood the market might seem like a quick fix, but more is needed to address the real problems.
Let’s ask the President. Oh, I forgot, it’s his 66th birthday, and he just left us here, arms crossed, because there’s something more pressing to face than our economic and food woes: a 30-minute talk he is scheduled to deliver at the Milken Institute in Singapore.
Or is it the finals of the Formula One Singapore Grand Prix 2023?
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