J. Albert Gamboa l November 24, 2023 l The Manila Times
CONSUMER staples refer to essential goods that are used by the general public. This industry sector encompasses products that most people need — no matter how good or bad is the state of the economy. Since they are non-cyclical and are always in demand, these products are impervious to business cycles, with consumer demand at a relatively constant level regardless of their price.
One such consumer staple is liquefied petroleum gas (LPG), which is the fuel of choice for over 40 million Filipinos. According to the Philippine Statistics Authority (PSA), four out of 10 households in the country use LPG daily as fuel for cooking, heating, and lighting. It is also used by industrial and commercial establishments as well as fuel for motor vehicles.
After decades of gradual decline amid the proliferation of illegal activities by opportunists in the LPG sector, a potential solution to this long-standing issue may have been found. Philippine National Police (PNP) MGen. Romeo Caramat 2nd, chief of the PNP Criminal Investigation and Detection Group (CIDG), has pledged to pursue LPG business operators nationwide who persist in wrongdoing despite existing laws.
Republic Act 11592, or the “LPG Industry Regulation Act of 2021,” clearly outlines the guidelines for businesses in this sector to ensure the safe and proper use of products purchased by the public. Despite joint efforts by the Department of Energy and the LPG sector to inform business owners through regional and national summits, illegal activities persist due to the lack of police power.
With the CIDG entering the scene, Caramat’s team swiftly raided a large warehouse illegally storing canisters and other LPG refill equipment. The government stands to benefit from his proactive stance in continuously monitoring those engaged in illicit trade because offenders will be compelled to comply by obtaining the proper permits and paying the correct taxes.
Beyond addressing the illegal activities of some opportunistic businessmen, the CIDG is poised to resolve other issues in the LPG sector. For instance, it will help ensure that employees and workplaces are drug-free, with an emphasis on responsible practices for the safety of LPG product users.
Since the stakeholders aim to clean up their ranks with the assistance of the CIDG, former congressman Arnel Ty of the LPG Marketers Association remains hopeful for the future of this once-vibrant industry.
Another staple commodity that needs an overhaul is rice, the favorite meal component of most Filipinos. Among the country’s 82 provinces, the top 10 producers of unhusked rice or palay are Nueva Ecija, Isabela, Pangasinan, Cagayan, Iloilo, Camarines Sur, Tarlac, North Cotabato, Leyte and Negros Occidental based on recent PSA data.
Supply and price woes have perennially plagued the rice industry. Now comes an out-of-the-box solution from Camarines Sur Rep. Luis Raymund Villafuerte 2nd that seems to be the most prudent and sensible use of the estimated P40 billion annual government subsidy for the rice subsector to pull down the commodity price to P20 per kilogram starting in 2024.
Under Villafuerte’s proposal, the P40 billion government subsidy should be used to provide financial aid of P40,000 per hectare for every target farmer-beneficiary in the country’s top 10 palay-producing provinces, tilling an initial combined area of 1 million hectares. He thinks this will not only help stabilize domestic supply and eventually pull down the price of rice in the local market, but will also lead to lower import volumes of the staple grain and conserve precious dollar reserves.
This subsidy-cum-contract-growing idea is anchored on making small farmers harvest a combined 5 billion kilos of rice at the end of the planting season in 2024. The government will then sell 1.5 billion kilos at P20 per kilo to low-income families and another 1.5 billion kilos at P30 each to the rest of the consumers.
Villafuerte said he has already discussed the proposal with newly appointed Agriculture Secretary Francis Tiu Laurel 2nd. He suggested that the target farmer-beneficiaries in the top 10 palay-producing provinces be selected by their local government units in tandem with the Department of Agriculture.
Buying the farmers’ produce after giving them the P40,000 per hectare subsidy would encourage the target beneficiaries to produce more from their farms. To further incentivize them, Villafuerte’s proposal includes cash prizes, farm machinery, fertilizers, and other inputs to be awarded to farmers generating the highest per-hectare yields in the selected provinces.
Funding for this rice productivity program can be sourced mainly from Congress’ annual General Appropriations Act. “This is an excellent solution because we will be providing needed production assistance to our palay growers that would stop them from seeking pre-planting loans from usurers or unscrupulous traders,” Villafuerte explained. He believes that selling rice at P20 a kilo is doable starting next year, contrary to the contention of agriculture officials in the executive branch.
*** The author is the chief finance officer of Asian Center for Legal Excellence and vice chairman of the Finex Ethics Committee. The opinion expressed herein does not necessarily reflect the views of these institutions and The Manila Times. #FinexPhils www.finex.org.ph