Ex-DOF Usec. Cielo Magno: Rice price cap will lead to a shortage, black market

Former Finance Undersecretary Cielo Magno, who resigned after a social media post on rice price caps, said the government-imposed price ceiling would likely lead to a shortage and a black market on rice.

On the Mangahas Interviews, Magno stressed that the price cap will not benefit farmers, small retailers, and low-income earners.

“Ang una po natin itatanong ay ano ang magiging natural na reaction ng mga mamimili kapag pwinersang ibaba ang presyo ng bigas,” she said.

(The first question we need to ask is what the natural reaction of consumers would be if you forcibly lowered rice prices.)

“So, kung ako po ay middle-income family… ang una ko pong gagawin, lalo na pinahayag na ito ay temporary, bibili ako agad ng maraming bigas. Mag iimbak ako dahil mas mababa ito,” she added.

(If I am a middle-income family… the first thing I would do, especially since this was announced to be temporary, I would buy large amounts of rice. I would store it.)

Magno said this may cause difficulties for lower income individuals or families who can only afford to buy a day's worth of rice.

“Ang magiging problema po niyan ay magkakaroon ng kakulangan ng bigas na mabibili. Mahihirapan po akong mag hanap ng bigas,” she said.

(The problem would be that this will cause a shortage. I will have difficulty finding rice.)

Meanwhile, Magno said suppliers, especially sari-sari stores or small businesses, would suffer a loss as they would have to sell the rice at a price cheaper than what they paid.

Traders, meanwhile, would store their rice for several months until the price cap is lifted.

“Kung hindi nila ibebenta ‘yung bigas nila sa mababang presyo dahil ayaw nilang malugi, ‘yung kabila naman maraming gustong bilhin dahil mababa ‘yung presyo, ang problema po natin diyan ay shortage. Wala tayong mabibiling bigas,” she said.

(If they won't sell their rice at a cheaper price because they don’t want to suffer losses, and middle-income consumers want to buy a lot due to the lower price, this will lead to a shortage.)

Magno added that if traders were then forced to sell their rice, traders would haggle with farmers for a bargain price.

“Mapipilitan po silang (farmers) ipag-benta ‘yung palay nila sa mababang presyo dahil ang mga traders kailangan kumita. Kailangan din po ipasok doon sa ibabayad nila at sa kanilang presyo ‘yung gastusin nila sa pag transport ng palay sa pag tistis ng palay,” she said.

(Farmers would be forced to sell their rice cheaper because traders also need to earn. They must also include the cost of transporting and milling.)

“So ngayon ang pressure para ibaba ang halaga ng palay ang mga nasa magsasaka (So now, the pressure to decrease their prices would be on the farmers),” she explained.

Magno said that the price cap may also result in a black market.

“Maghahanap talaga tayo kung saan tayo pwedeng bumili ng magandang klase. So maaring sa black market po tayo bumili,” she said.

(Consumers would need to find a source for good quality rice. They might resort to purchasing from the black market.)

President and concurrent Agriculture Secretary Ferdinand “Bongbong” Marcos Jr. issued Executive Order 39, which mandates a price cap of P41 per kilogram for regular-milled rice and P45 per kilogram for well-milled rice, effective September 5.

Resignation

Last week, Magno confirmed that she stepped down as an undersecretary of the Finance Department. 

Malacañang later confirmed her termination, with the official letter saying her tenure “expired.”

“Unang-una po in-ask ako mag-resign at nag resign naman po ako nung Wednesday. Nung Friday, last week, nakatanggap po tayo ng sulat mula sa Malacañang na ako daw ay nag-expired,” Magno said.

(First, I was asked to resign, and I resigned on Wednesday. Friday last week, I received a letter from Malacañang that my tenure had expired.)

“Kung ano man po ang talagang nangyari ay masaya po akong bumabalik sa University of the Philippines (regardless of what happened, I’m happy to return to UP),” she added.

Magno was reportedly forced to resign due to a post on her Facebook account which seemingly criticized the imposition of the rice price ceiling.

An Office of the Executive Secretary statement said that Magno's termination "could only be expected as she clearly does not support the administration and its programs for nation-building."

When asked about the supposed bad blood between her and Executive Secretary Lucas Bersamin, Magno said she was unaware of Bersamin's feelings.

According to Magno, Malacañang wanted to remove her from her post as early as July.

She said Finance Secretary Benjamin Diokno talked to President Ferdinand Marcos Jr. about her Facebook posts.

“Kami po ni Secretary Diokno ay nag usap noon at ang binanggit po niya sa akin ay kinausap niya ‘yung Presidente at pinaliwanag niya na ako naman ay nakakatulong talaga sa mga repormang isinusulong ng DOF,” she said.

(Secretary Diokno and I talked, and he told me he spoke with the President. He explained that I had been helpful with the reforms at the DOF.)

“So, ayon po kay Secretary Diokno, sabi daw po ng Presidente ay maari niya akong i-keep sa DOF (according to Secretary Diokno, the President said he may keep me at the DOF),” she added.

Magno also said her Facebook posts were public for transparency.

“Sabi ko nga po kay Secretary Diokno, hindi ko naman kinakaila kung ano ang pulitika ko at kung saan ako nakatungtong, ano ang mga pinanindigan ko at pinaninindigan ko, at para magkaroon po tayo ng transparency kung ano ba ang pagkatao ko,” she said.

(I told Secretary Diokno that I was not hiding my politics nor what I stood for, what I believed and continued to believe, and for there to be transparency on who I really was.) — DVM, GMA Integrated News