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IS the Philippine rice importation sector undergoing a “creeping cartelization” under the auspices of the Department of Agriculture (DA)?

Early this year, Agriculture Secretary Francisco Tiu Laurel Jr. announced a policy of setting a maximum volume of rice imports monthly. Following the ban on rice imports carried out from September to December 2025 under Executive Orders 93 and 102, the good secretary’s measure would presumably shield Filipino farmers from a recurrence of severe drops in farmgate prices resulting from the massive surge of imported rice last year. At the same time, enough imported rice would be allowed to stabilize overall supply and prices of the country’s staple.

To operationalize the system, the secretary created a technical working group (TWG), reportedly chaired by president Joseph Rudolph Lo of Food Terminal Inc. and with the heads of the DA’s rice industry development program, National Food Authority, Bureau of Plant Industry (BPI), Philippine Rice Research Institute, Philippine Rice Importers Association and the Philippine Rice Industry Stakeholders Movement as members.

Major rice farmers’ organizations were noticeably missing from the TWG.

Rice import quotas were set initially at 300,000 metric tons (MT) each for January and February and 150,000 MT in March, for a total of 750,000 MT. These were to be allocated to qualified importers on the basis of their average import performance in 2023, 2024 and 2025. They would then be issued the proper sanitary and phytosanitary import clearances (SPSICs) by BPI.

These targets were adjusted later to 450,000 MT each for January and February and 300,000 for March, plus 50,000 MT monthly for government-approved purchases — for a grand total of 1,350,000 MT.

Actual rice imports during the first quarter reached 1,305,000 MT, which were 550,000 MT, or 74 percent more than the original goal. (This volume also exceeded rice arrivals over the same period in 2025 by 37 percent). But wait! Weren’t rice imports supposed to be curtailed to protect local farmers from the adverse effects of over-importation?

Surprisingly, the monthly rice import quota and allocation scheme among importers were reportedly not covered by written official orders, but effected through mere verbal instructions by higher DA officials.

Problems arose when the import distribution guidelines were not followed consistently.

Take the case of Planters Products Inc. (PPI) started importing rice only in 2025, with a volume of 22,750 MT. Using 2023 to 2025 as the base period, PPI imported an average of 7,583 MT yearly, or 0.19 percent of 3,929,000 MT (the yearly average of rice imports).

Thus, PPI’s share of the January 2026 import quota should have been 0.19 percent, or 725 MT out of the total arrivals of 381,367 MT. Instead, PPI brought in 63,000 MT, or 16.5 percent of all imports!

Based on BPI records, as of April 23, 2026, the top 10 importers (PPI included) accounted for 21 percent of the total volume of 1,582,015 MT. The top 30 firms carried out about 40 percent of all imports.

In terms of import volume applied for, the top 10 corporations secured 43 percent of the total quantity of 2,118,981 MT and 23 percent of SPSICs from BPI.

Referencing George Orwell’s “Animal Farm,” some importers are more equal than others!

Lately, the DA announced that it was considering the continuation of import quotas and capping monthly arrivals from June to October at 200,000 MT.

The DA’s current import quota policy for rice is most likely illegal. Whether one likes it or not, under existing laws, the rice trade has been liberalized since 2019 pursuant to Republic Act (RA) 11203, or the Rice Tariffication Law (as amended by RA 12078). Unilaterally limiting rice entries is a form of quantitative restriction that is explicitly banned by the RTL and deemed illegal under the rules of the World Trade Organization.

The private sector is free to import rice, subject only to payment of import tariffs and compliance with quarantine regulations to safeguard the health and safety of humans, animals and plants.

Fair market competition, rather than bureaucratic decision-making, is expected to provide better food security for farmers and consumers.

The DA and BPI cannot legally repurpose the SPSIC as a mechanism for restricting import volumes, doling out import quotas, or controlling the timing of import shipments. Doing so will also open the door to corruption and supply disruptions.

While seemingly well-intentioned, this recent policy of restricting rice import quotas may ultimately undermine public welfare and interest. Enabling a few importers/traders to access state-determined levels of imported rice raises the likelihood of creating or abetting a cartel in the marketing of this staple. Unduly constricting the number of suppliers increases the opportunity for them to control prices for unmerited private gain, and at the expense of both consumers and farmers.

Must we still wonder why rice prices remain inordinately high, despite already low tariffs and rounds of price caps and maximum suggested retail prices?

Will mere warnings from the Philippine Competition Commission against collusive and anti-competitive behavior by importers and traders suffice?

If — and as the Secretary of Agriculture has publicly declared — profiteering is happening, where is the government’s iron hand that will finally employ its coercive powers against violators of RA 12022, or the Anti-Agricultural Economic Sabotage Act, passed by Congress almost two years ago?

And why is government running only after the small fry — the retailers who do not comply with the price caps, instead of the big fish — the importers and wholesalers who are raking in billions of pesos in extraordinary profits?

Leonardo Q. Montemayor is the chairman of the board of the Federation of Free Farmers and a former agriculture secretary.

Source : msn