Photo from: Asia Media International

Manila, Philippines – Agriculture secretary Francisco P. Tiu Laurel Jr. announced a food security emergency last February 3, 2025, to stabilize the increasing prices of rice by releasing the National Food Authority’s (NFA) buffer stocks.

Rice is a staple food in Filipino households, providing a major source of calories for the population and income for domestic farmers. However, rice prices have considerably skyrocketed despite decreased global market costs and the reduction in tariffs from 35% to 15%. This shows that the local market lags in responding to global changes. Additionally, the decision to announce a food security emergency also came from the recommendations of the National Price Coordinating Council (NPCC) after citing numbers from the Philippine Statistics Authority (PSA) that rice prices inflated by 17.9% in September 2023 which far exceeds the 4% food inflation target of the government.

The increased rice prices are a huge burden to most Filipinos, especially those in the lower-income bracket, a reason why Agriculture Secretary Tiu Laurel Jr. declared a food security emergency in the country. According to Republic Act No. 12078, under an amendment to the Rice Tariffication Law, the agriculture secretary may declare a food security emergency to ease price increases and it can be lifted when the situation improves. With the current food security emergency declaration, the Department of Agriculture (DA) can sell NFA buffer rice stocks to government agencies and local government units. These stocks can be sold at a much lower price than the average market price. Currently, local well-milled rice is priced between PHP 40 to PHP 55 per kilo, on the other hand, regular imported rice ranges from PHP 38 to  PHP 48 per kilo, while imported well-milled rice is priced at PHP 40 to PHP 52 per kilo. Meanwhile, the NFA buffer stocks will be sold to government units and consumers for less than PHP 35 per kilo. To date, there are 300,000 metric tons of rice in buffer stock, half of which may be released over the course of six months, ensuring that most Filipinos will have access to affordable rice for the following months. 

With the DA's declaration of a food security emergency, rice buffer stocks held by the NFA were released to offer a short-term remedy to high rice prices, which can result in lower consumer prices and ease inflationary pressures. Millions of Filipino consumers can benefit from this declaration since they spend a significant portion of their disposable income on this staple. This declaration shows that the government is taking action to protect consumers from the skyrocketing prices of rice. However, the release of rice from the government's buffer stocks can lead to a selling price below the market value, that will result in at least PHP 2.25 billion worth of financial losses for the NFA. Furthermore, the NFA's stock is only around 300,000 metric tons, which may only provide temporary relief. Fermin Adriano, an agricultural economist and former agriculture undersecretary, highlighted that if these stocks were to be distributed nationwide, they might only last 9 days at most. Consequently, once the stocks run out, prices may start to rise again if structural issues are not addressed. 

The declaration of the Food Security Emergency is expected to have a positive impact on society, particularly for millions of Filipinos who spend a significant portion of their disposable income on rice, thereby enhancing short-term consumer welfare and economic stability. However, with the NFA’s limited stock at only around 300,000 metric tons, it may be at risk once the stocks run dry, resulting in a rise of prices. Apart from this, the implementation of this emergency measure may inadvertently protect market distortions and allow powerful rice traders and hoarders to continue manipulating supply, discouraging local production. In effect, while the emergency declaration can temporarily benefit consumers, it also reflects the government’s limited capacity to confront powerful industry actors directly. The move to declare a food security emergency is just a band-aid solution to the decade-old issue of agricultural food security in the country. The move to release the buffer stocks of rice from the NFA is a mere facade of how the Philippine economy is no longer self-sufficient in producing a staple to the Filipino table. Instead of focusing on short-term solutions, the government, especially the agriculture department, should increase its investments in the agriculture sector to ensure that Filipinos won't have to experience skyrocketing prices of elementary consumption needs.

Food insecurity is a long-standing challenge that our country has been facing. Historically, the Philippines exported rice irregularly during the 1820s until the demand for non-rice exports such as cane sugar, indigo, abaca, and coffee spurred. What would soon follow was a perennial rice shortage beginning in 1870, which compelled the country to import rice from French Indochina, Siam, and Burma. The situation would only worsen after the revolution (1896-1898) and the Filipino-American War (1899-1906), leading to a significant decline in rice production due to lands untouched, carabaos reduced, and agricultural labor disrupted. The present food security emergency reflects the historical struggle and lack of effective policies regarding food. As of 2021, the Philippines ranked 64th out of 113 countries in the Global Food Security Index (GFSI). Beyond the decline of rice production, the Philippines' agricultural sector also faces limited access to post-harvest facilities and financial assistance. Farmers who are the backbone of Philippine agriculture face struggle often with low productivity, lack of support from the government, and exploitation in trading systems. This structural issue has made the opportunities for increasing food population limited. Not only are we struggling to increase domestic rice production, but the population is also struggling with insufficient energy and nutrient intake. Additionally, households in the lower income bracket and those living in rural areas spend a higher percentage on food yet are plagued by low diet quality and high incidence of malnutrition.

FUN FACT:

But how do buffer stocks ease skyrocketing prices in an economy?

Several factors beyond human control—such as weather, natural disasters, or diseases—can affect food production, making staple food items vulnerable to price instability. One way to control these fluctuations is through the use of buffer stocks. Buffer stocks are a method of government intervention used to maintain price stability by purchasing excess supply during periods of oversupply and releasing it during shortages.