Philippine President Ferdinand Marcos Jr promised to cut rice prices in half on the campaign trail. It hasn't worked out that way. Image: Twitter / The Blog 101

MANILA – Just weeks after appointing A-list technocrats to his cabinet, President-elect Ferdinand “Bongbong” Marcos Jr is showing his populist stripes.

The Filipino leader, who will officially be sworn in by the end of this month, has made the unprecedented move of appointing himself as incoming agriculture secretary, thus concurrently serving in key top positions in the next government.

The surprising move comes amid soaring inflation, as millions of Filipinos grapple with record-high energy and food costs.

According to the Philippine Statistics Authority, inflation hit 4.9% in April, the fastest pace in more than three years and way higher than the 2-4% inflation target band set by the Bangko Sentral ng Pilipinas (BSP) for 2022.

The Department of Energy, meanwhile, has warned of a “continuous increase” in gasoline prices for the foreseeable future, driven by the ongoing conflict in Ukraine.

The incoming president’s critics claim he lacks the expertise and understanding of pricing mechanisms to transform the Philippines’ agricultural sector.

Others sense that the namesake son of a former Filipino dictator is merely engaging in pie-in-the-sky populism, particularly in regard to his promise to slash the price of staple foods by more than half.

In particular, he has claimed he will cut rice prices by more than half to 20 pesos (US$0.3704) per kilo.

To do this, Marcos has said there must be a regular and thorough inventory of rice harvests held by the Department of Agriculture (DA) and the National Food Authority (NFA), both of which will procure rice harvests from local farmers at higher and more competitive prices. According to Marcos, this will prevent rice cartels from controlling the supply.

A Filipino rice farm at harvest season. Photo: Twitter

Marcos likely realizes that well-targeted agricultural policies and programs will be key to maintaining his popularity and political stability after his recent landslide election win.  

“As to agriculture, I think that the problem is severe enough that I have decided to take on the portfolio of Secretary of Agriculture, at least for now and at least until we can reorganize the Department of Agriculture in the way that will make it ready for the next years to come,” Marcos told a news conference days before his inauguration.

“We need to change many things. There are offices that are no longer useful, or need retooling post-pandemic since things are being done differently now,” added the new president-elect while vowing to enhance the country’s food security and overhaul the agriculture sector.

To be sure, the Philippines’ agricultural sector is in deep crisis. Despite having one of the most fertile agricultural lands in the world, the country has repeatedly faced food shortages in recent decades.

Despite a deep economic recession in 2020, the Southeast Asian country remained the world’s largest rice importer, according to the United States Department of Agriculture Foreign Agricultural Services.

A year earlier, the Philippines imported 2.9 million metric tons of rice, with imports nearly quadrupling in the last three years. Nearly 80% of the Philippines’ rice imports are sourced from Vietnam, underscoring the former’s precarious situation.

Meanwhile, the average age of farmers in the Philippines is around 58 years old, which portends a long-term labor shortage in the critical sector.

The Philippines’ food security crisis is the upshot of a failed land reform program, a lack of investment in rural infrastructure and agriculture financing, and a proliferation of import cartels and predatory middlemen who have crushed various agricultural industries.

Things came to head in 2018, when the government confronted a simultaneous increase in the price of rice, a rapid depletion in food reserves and weevil infestations that devastated crops.

In the third quarter of that year, the price of milled rice jumped to 46 pesos (US$9) per kilo, pushing millions of Filipinos close to or over the poverty line.

Outgoing President Rodrigo Duterte’s administration was thus forced to revisit its policy of quantitative restrictions (QRs), which ensured only a few suppliers secured import licenses from the National Food Authority (NFA) to protect domestic producers.

President Rodrigo Roa Duterte checks the quality of rice harvested during the Grand Harvest Festival of SL Agritech Corporation at the Nagkakaisang Magsasaka Agricultural Primary Multipurpose Cooperative (NMAPMPC) Compound in Talavera, Nueva Ecija on April 5, 2017. Photo: Presidential Photo

In 2019, the Philippines passed a landmark Rice Tariffication Law, which liberalized rice importations in order to reduce the price of staple food in the country.

The move was particularly controversial, with several senators  and civil society groups warning of further damage to the country’s already fragile agriculture sector.

Meanwhile, the price of staple foods such as rice has not significantly declined, with the ongoing shocks to global energy and food markets triggering fast-rising inflation in the Philippines.

On the campaign trail, Marcos Jr zeroed in on the sad state of the country’s agriculture sector as a central theme of his candidacy. He vowed to halve the price of staple foods such as rice by amending the Rice Tariffication Law and strengthening food production at home.

“Our farmers are pitiful because even without being ravaged by typhoons and calamities, they are already in a catastrophe because they are even being charged for water for irrigation,” Marcos said during an interview in April.  

After winning the presidency, Marcos Jr sought to reassure jittery markets by appointing seasoned technocrats to key positions in his cabinet, including at the department of finance, national economic and development authority and the BSP.

All the while, though, the new Filipino leader has refused to budge on his various populist pledges, which analysts and observers note he’ll be able to more readily implement as acting agriculture secretary.

“From the very beginning, I have always said that agriculture is going to be a critical and foundational part of our economic development or economic transformation as we anticipate the post-pandemic economy,” Marcos Jr told the media earlier this month.

He alleged neighboring Vietnam and Thailand were planning on forming rice export cartels, which if true would further exacerbate the Philippines’ food insecurity.

“You may have noted that Thailand and Vietnam, for example, one of our main sources of imported rice, have decided to ban their rice exports at least for now. So we have to compensate for that by increasing production here in the Philippines,” he said.

Marcos Jr has already promised to overhaul the Department of Agriculture by reorganizing its attached agencies such as the National Food Authority (NFA), the Food Terminal Incorporated (FTI) and the Kadiwa program.

Philippine presidential candidate speaks at a campaign rally on April 4, 2022. Photo: Facebook

Marcos Jr has emphasized the need to overhaul the country’s agricultural sector as a “critical and foundational part” of the Philippines’ post-pandemic recovery and long-term economic “transformation.”

Yet there are few, if any, indications so far that the new Filipino leader is willing to address entrenched structural problems, including price-distorting food import cartels, predatory intermediaries and, perhaps most importantly, the lack of land reform, which continues to keep countless Filipino farmers in abject poverty.

Some critics fear that Marcos Jr, who has been accused of corruption and tax evasion, seeks direct control over the 71 billion peso ($1.4 billion) agricultural trust fund, which they note was previously misappropriated by his ex-dictator father’s cronies.

Leading legislators and experts, meanwhile, have openly questioned the feasibility of Marcos Jr’s populist pledges including his ambitious food price pledge.

“Impossible. You kill the livelihood of 3.6 million rice farmers,” said leading economist and congressman Joey Salceda, who warned of potentially disastrous repercussions of the new president’s promise to halve the price of basic commodities such as rice.

Rolando Dy, executive director of the Center for Food and Agribusiness at the University of Asia and the Pacific, similarly dismissed the pledge as “impossible”, while calling on the new Filipino president to instead focus on appointing competent officials.

“He has to rely on good advisers. He has to appoint competent undersecretaries for operations and high-value crops,” Dy said.