UNIVERSITY OF SAN CARLOS

School of Business and Economics

Department of Economics

EFFECTS OF IMPORTING RICE TO

LOCALLY-PRODUCED RICE

A Review of Related Literature

submitted to the Faculty of the

Department of Economics

ABENDAN, Maria Cieleta Corazon

ARANCO, Glydel El Amor

COMOTA, Mae Angelica

POLANCOS, Kimberly

August 09, 2015

EFFECTS OF IMPORTING RICE TO LOCALLY-PRODUCED RICE

I. Introduction

Rice is a constant in every Filipino’s diet. Filipinos eat it with every meal, three

times a day, throughout the week, and all through the year. A meal without rice isn’t

considered as one. There is a saying that “without rice, you haven’t eaten” this phrase

precisely sums up the meaning of rice to every Filipino.

Rice being the main staple of the country is also a highly political commodity.

The rice sector has always been the center of agricultural policies. One of these policies

was the “Philippines Rice Master Plan 2009-2013” it envisioned a 100% self-sufficient

rice economy by 2013. Unfortunately, the Philippines was not able to achieve its goal.

As of 2013, the Philippines was the 7th largest rice-producing country in the

world, producing 11 million metric tons, but it was also the 5th biggest rice-importing

country in the world, importing 1.4 million metric tons. A question now arises from this

information, if we produce that amount of rice, why do we still have the need to import

rice? What are the effects of importing rice to locally-produced rice?

1

II. Rice Production, Rice Consumption and the Need to Import Rice

In the mid-1960s, there was a steady growth of rice production until the 1980s

where the Philippines was 100% self-sufficient in producing rice, so much so that they

could export the surplus to other countries. However, this did not last forever.

There were certain factors that affected rice production in the 1990s, one was

urbanization. Lands were constantly converted into subdivisions and commercial

districts. Another factor was the fact that Philippines was made up of 7,000 separate

islands which made a centralized irrigation system for the rice paddies difficult. Other

factors include the transitioning of the government and other political issues at that time.

There was also the issue that rice is what a few farmers grow, and nearly all

consumers eat. The boom in the population overwhelmed the production of rice, to the

point where locally-produced rice cannot support the entire consumer demand.

This is also what we are facing right now. The current production of rice in the

Philippines cannot catch up to the rapid growth of its population and consumption.

Locally-produced rice cannot feed all the demand of the people. Therefore, the

Philippines has to import rice from neighboring countries to maintain a balance between

the supply and the demand of rice and to make sure that every Filipino is fed.

2

III. Conclusion

It all boils down to this: Rice is a need. No matter what our status in life is, rich or

poor we all eat rice daily even without enough viand. Imagine eating “siomai” without

“poso” or adobo without rice. Will that be enough? Are you satisfied? A meal without rice is

not a complete meal at all. You are not a Filipino if rice is not a part of your diet but with the

rapidly rising population of our country; domestic rice production simply can’t keep up.

In conclusion, the domestic production of rice is not enough to feed and satisfy the

mouths of 98.39 million Filipinos, that is why the shortage is augmented by rice importation.

The effect of importing rice to locally-produced rice is a cycle: no imports, prices will

decline; consumption goes up and when consumption goes up even higher, there will be

shortage and this shortage will again be augmented by rice imports to satiate the needs of the

every Filipino in the country.

3

References:

Bordey, F. H., Beltran, J. C., & Launio, C. C. (2012). Future directions of rice trade in the

Philippines. Makati City, Philippines: Asian Institute of Management.

Briones, R. M. (Feb. 2010). Scenarios and options for productivity growth in Philippine

agriculture an application of the AMPLE. Philippine Institute for Development Studies.

10(05), 37. Retrieved from: http://dirp3.pids.gov.ph/ris/dps/pidsdps1005.pdf

Cruz, C. J. (Mar-Apr. 2014). Surveillance of the Philippine rice market. Bangko Sentral ng

Pilipinas: Economic Newsletter. 14(02), 1-4. Retrieved from: http://www.bsp.gov.ph/

downloads/EcoNews/EN14-02.pdf

Dawe, D. C. (Ed.), Moya, P. F. (Ed.), & Casiwan, C. B. (Ed.). (2006). Why does the Philippines

import rice?: meeting the challenge of trade liberalization. Laguna, Philippines:

International Rice Research Institute (IRRI). Retrieved from: http://books.irri.org/

9712202097_content.pdf

Mangabat, M. C. (Dec. 1999). Effects of trade liberalization on agriculture in the Philippines:

commodity aspects. The CGPRT Centre: The Working Paper Series. 99(15), 5-26.

Retrieved from: http://ageconsearch.umn.edu/bitstream/32689/1/wp990051.pdf

Lantican, F. A., Quiloy, K. P., & Sombilla, M. A. (2011). Estimating the demand elasticities of

rice in the Philippines. Retrieved from: http://searca.org/index.php/research-and-

development/rad-projects/1033-estimating-the-demand-elasticities-of-rice-in-the-

philippines

5

Litonjua, A. C., & Bordey, F. H. (Sept. 2014). How can rice trade liberalization affect producers

and consumers. Rice science for decision-makers. 1-2. Retrieved from:

http://www.philrice.gov.ph/wp-content/uploads/2014/09/

RS4DecisionMakers_september2014_G.pdf

Philippine rice information. (2011). Ricepedia. Retrieved from: http://ricepedia.org/philippines

Pochara, F. (Aug. 2012). Commodities exchange: options for addressing price risk and price

volatility in rice. Asian Development Bank Sustainable Development: Working Paper

Series. 12(25), 4-5, 10-11. Retrieved from: http://www.adb.org/sites/default/files/

publication/29972/adb-wp-25-commodities-exchange.pdf

Principle rice importing countries worldwide in 2013. (2013). Statista. Retrieved from:

http://www.statista.com/statistics/255948/top-rice-exporting-countries-worldwide-2011/

Tibao, N. Y. (n. d.). Why does the Philippines import rice: a solution to the rice shortage.

Taichung, Taiwan: National Chung Hsing University. Retrieved from:

http://www.nodai.ac.jp/cip/iss/english/9th_iss/fullpaper/1-1-5nchu-tibao.pdf

To import or not to import. (June 2011). Rice Matters: The PhilRice Official Blog. Retrieved

from: https://ricematters.wordpress.com/2011/06/13/to-import-or-not-to-import/

Top ten countries with most rice producing countries. (2013). Maps of the World. Retrieved

from: http://www.mapsofworld.com/world-top-ten/rice-producing-countries.html

6