…and that’s only on one purchase.
With rice exporters offering to sell at prices way above the country's expectations, the Philippine government is expected to lose a lot more money than it initially projected. At $1,000 per metric ton, the government will spend P41/kilogram plus freight, duties, VAT and other expenses. In total, the cost can go as high as P65/kg.
Not wanting to create panic, the government may opt to sell at a loss, as the NFA usually does, in order to keep the local prices at the present levels. As a result, 45 x 1,000 kilos/metric ton x 500,000 metric tons (total order for this week), will mean a government loss (subsidy) of $549 million or P22.5 Billion.
If the world prices continue to rise, the government will be incurring bigger losses with every time it makes a purchase. And when the government has ran out of money to finance the purchases and subsidies, a real rice shortage and economic crisis can be expected to immediately occur. With that in mind, it's best that we seriously look into ways of increasing our rice harvests to the point of efficiency and think or rice alternatives. We should also start conditioning our taste buds to do away with rice. As The SpittingVessel once wrote, the psychological and cultural values of rice for us, far outweighs its nutritional values.
Within the next few days, articles dedicated to rice substitutes will be uploaded.