PHDespite the criticism that greeted its announcement, the P20-a-kilo rice program to be rolled out this week initially in the Visayas is a welcome respite for consumers, particularly the poorer households grappling each day with high food prices.
It was a promise of President Marcos during his 2022 campaign that was mocked by his rivals as an empty one until last week, when Agriculture Secretary Francisco Tiu Laurel Jr. unveiled it in a press conference at the Cebu provincial capitol, where the Chief Executive earlier met with governors in the region led by Gov. Gwendolyn Garcia of Cebu to discuss the program’s initial launch.
As expected, many perceived the move as politically motivated since it came barely three weeks before the May 12 elections, targeting a region with nearly 14 million voters. However, while the program will somehow boost the chances of administration candidates, the more pressing reason to rush the program is the excess rice stocks in the warehouses of the National Food Authority (NFA).
The Department of Agriculture (DA) said they have 380,000 metric tons of rice that need to be disposed of to give way for new stocks coming in.
“So they have to dispose of it right away.”
While the program will admittedly benefit households, it will come at a steep cost to the government. The NFA will be selling the same rice that it now sells at P33 a kilo, effectively providing a subsidy of P13 a kilo of the staple to be sold under the program. The DA said it has an allocated budget of P3.5 billion to P4.5 billion for the initial rollout.
Funding, in fact, is the biggest challenge facing the government. It will need billions of pesos to sustain the P20-a-kilo rice program if the DA is to heed the President’s directive to eventually roll out the program nationwide and until 2028. Latest data from the Bureau of the Treasury showed a budget deficit of P103.1 billion in the first two months of 2025. For the whole of last year, the budget gap was P1.51 trillion.
Economists have long warned that broad subsidies will only worsen the government’s budget deficit. The NFA selling subsidized rice nationwide to all households will be similar to the ill-fated Oil Price Stabilization Fund, established in 1984 by then President Ferdinand Marcos Sr. by renaming a 1971 subsidy scheme to control domestic pump prices of fuel products. It was abolished in 1996 with the deregulation of the oil industry, but not after saddling the government with a mountain of debt.
The government must ensure that if the P20-per-kilo rice does go nationwide as the President had directed, it must be ready with the funds for this. One way is to realign the allocations for government spending items that can wait. It can also hope that world rice prices continue to remain weak, as a sharp spike can derail the plan by making the staple very costly to subsidize. Stopping the program shortly after the elections will only prove its critics right.
Credits: Philippine Daily Inquirer Editorial Column
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