Vietnam pushes five-year rice supply deal with Philippines

JAKARTA – Vietnamese Prime Minister Pham Minh Chinh is pushing for a rice supply deal that will allow his country to export rice to the Philippines for five years as the Marcos administration deals with price spikes of the food staple.

The supply agreement was proposed during Pham’s bilateral meeting with President Marcos on the sidelines of the 43rd Association of Southeast Asian Nations Summit and related summits in Jakarta, yesterday.

“I would suggest that the Ministries of Trade and Agriculture of the two countries will work together so that we can come up with a five-year agreement on supply of rice and actually… the price will be determined by the market,” Pham said.

Marcos welcomed Pham’s suggestion, saying he recognized the market’s current volatility and the need for countries to make adjustments.

“However, the suggestion of a longer term arrangement is an important one because just having that as an assurance will stabilize the situation, not only for the Philippines, but for all of us in the region,” the President said.

“But we will work continuously. We have managed what we have before (inaudible) to an agreement in terms of the rice importation by the Philippines and I am very confident that we will once again come to a consensus and agree,” he added.

The Philippine government has undertaken measures to address the escalating prices of rice, including imposing price caps on the food commodity. The mandated ceiling for regular milled rice is P41.00 per kilogram while the price cap for well-milled rice is P45.00 per kilogram.

The price ceilings were computed based on the average rice prices from May to July.

The price ceilings, which will not cover special and premium rice, took effect last Tuesday. The trade department has also mobilized price monitors and has coordinated with local governments to curb hoarding and price manipulation.

Cambodia as rice source

During his bilateral meeting with Cambodian Prime Minister Hun Manet, Marcos raised the possibility of sourcing rice from Cambodia.

In a statement, Presidential Communications Secretary Cheloy Garafil said the Philippines intends to request the Cambodian government to ease the terms and conditions for Filipino rice importers to ensure a steady supply of the staple.

Initially, business-to-business sales deals between Khmer Foods Co. and rice importers in the Philippines resulted in the export to Manila of about 2,500 tons of rice in May this year. It was the first time the Philippines is importing a significant tonnage of rice from Cambodia after the passage of the Rice Tariffication Law in 2019.

“Cambodian officials said their country is targeting to get a one percent share of the market of imported rice in the Philippines by 2024 and encouraged stakeholders to sustain and make more efforts to increase rice exports to the Philippines,” Garafil said.

In 2008, the Philippines signed a memorandum of agreement on the supply of Vietnamese rice to the Philippines, allowing Hanoi to sell up to 1,500,000 metric tons of the food staple to Manila from 2008 to 2010.

Vietnam supplies around 90 percent of the Philippines’ rice imports. It exported 4.84 million metric tons of rice worth $2.58 billion from January to July this year.

The Philippines imported 1.5 million tons of rice from Vietnam worth $772.4 million in the first five months of 2023, equivalent to 42.3 percent of Vietnam’s total rice exports for the period.

Direct flights

The Philippines is also eyeing a stronger partnership with Cambodia on commercial aviation as both countries agreed to expand the direct flights between them because of improvements in the COVID-19 situation and relaxing of mobility restrictions.

“I shall, as my homework when I get back, look into the possibility of our airline increasing the number of flights to other destinations in Cambodia that we would like to go to. This is something that goes both ways,” Marcos said.

Marcos and Hun also tackled partnerships in the areas of food security, trade and commerce, and people-to-people exchanges.

“I am a great believer of multilateral discussions but I also give equal importance to bilateral arrangements that we might do. Once again, I’m very happy to have had this exchange and I think, as I said, we’ve already identified so many areas that we can start off with,” Marcos said. “I see that there’s so much room for growth, so much room for partnership.”