Garcia, Dan Drexter Z.

March 1, 2016
2014-21141 BS EE CEAT Group 2
Philippines’ Stock of Rice in Shortage
Rice has been a vital food Filipinos eat every single day. The quantity demand for this staple increased
as the number of Filipino people grows. By this time, the quantity supplied of the food is not enough to suffice
the quantity demanded. Thus, our country is facing a shortage of rice. Various factors contributed to lesser
quantity supplied of the crop such as typhoons and El Niño. With this, our government does necessary actions
to meet the needs of the people.
As of January 1, 2016, a total of 3.20 metric tons of rice was in household and commercial stocks, and
National Food Authority (NFA) depositories which could be utilized for 93 days. The stocks, as of that year, is
20.2% higher than last the stocks last January 2015 (Philippine Statistics Authority, February 2016).
Meanwhile, in December 2015, the average prevailing price of rice in a retailer store is P 41.11 per kilogram,
lower by 4.24% than the price last December 2014, which is P 42.93 per kilo (Philippine Statistics Authority,
January 2016).
There are various factors that affect the supply of rice in the market. First, the ever-disastrous typhoons
such as Lando, which trailed in the Central Luzon and CAR, damaging the agricultural sector that decreased the
rice production yield. Second, the adverse effect of El Niño brought dry field, causing the crop to be destroyed.
Third, the insufficiency of water supply decreased the Caraga region’s harvest. This was due to a malfunction in
the National Irrigation System’s main canal in Bayugan City, Agusan del Sur and to inadequate amount of
rainfall in Surigao del Norte and Surigao del Sur. Fourth, the incidents of pest attack such as black bugs, tungro
and rodents lowered the production yield in CALABARZON (Philippine Statistics Authority, January 2016).
Other factors that could affect the supply of the crop are hoarding of stocks by the suppliers and illegal
exportation, and lack of modern technologies. The rice cartel could hold the rice stocks to bring lesser quantity
supplied in the market, which in return will increase the price of it. Illegal exportation of rice also decreases the
rice stocks in the country. In addition, lack of modern application in planting and milling causes the farmers to
produce less. The traditional method of farming is slow and inefficient as compared to the modern one. As of
now, only few improvements could be traced in the agricultural sector in terms of modern machineries. The
quantity supply of rice could also be decreased whenever there is a high quantity demand for it.
Insufficiency in stocks or shortage, due to less production, causes the government to import rice to meet
the needs of the people. The NFA, together with other government agencies such as Bangko Sentral ng Pilipinas
(BSP) and National Economic Development Authority (NEDA), decided to import a total of 900,000 metric
tons of rice in the first half of 2016 only (Miraflor, 2015). This imported rice is subjected to the regulation
called minimum access volume, which declares the quantity of rice to enter the Philippines at a lower tariff
(Galvez, 2015). Also, some private sectors are allowed by the government to import rice if the quantity supply
of the good is really low. Moreover, the government may set a maximum allowed rice consumption on a certain
region to manage the limited resource. Furthermore, they could improve the rice production in the next harvest
by upgrading the current technology, conducting seminars on field management, lending money to the farmers
at lower interest rate, and preparing enough if natural calamities strike. On the other hand, whenever in a
surplus, our country may export excess stock of rice to earn. They could also let the stocks go in the market to
lower the price of the good.
Truly, there are a lot of things that affect the stock of a good that could lessen or improve the number of
it. Lower quantity supplied over the quantity demanded could mean shortage, while higher quantity supplied
over quantity demanded could reflect surplus. Whatever the situation may be, either it is shortage or surplus,
economics will give an idea on how to manage limited resource to attain optimum satisfaction.
References:
Galvez, J. K. 2015. Rice sector must adopt to global competition. Retrieved on February 29, 2016 at
http://www.manilatimes.net/rice-sector-must-adapt-to-global-competition/230809/.
Miraflor, M. B. 2015. 900,000-MT rice imports due in 2016. Retrievend on February 28, 2016 at
http://www.mb.com.ph/900000-mt-rice-imports-due-in-2016/.
Philippine Statistics Authority. January 2016. Rice and corn situation and outlook, January 2016.Retrieved on
February 28, 2016 at http://agstat.psa.gov.ph/?ids=downloads_view&id=908.
Philippine Statistics Authority. February 2016. Monthly rice and corn stocks inventory, January 2016. Retrieved
on February 2016 at http://agstat.psa.gov.ph/?ids=downloads_view&id=910.