PHILIPPINE President Gloria Macapagal Arroyo's all-out campaign to ensure rice supplies amid skyrocketing prices risks sowing panic among Filipinos and raising the political and financial heat on her government. Arroyo fears hungry voters would take to the streets if rice shortages were to emerge and has taken extraordinary steps to guarantee sufficient supply but her public moves have helped increase prices, encouraged hoarding and stoked anxiety. “I think the President probably feels that if she does not do anything, people will think that she does not care, that she is not taking any action,” said Kwanchai Gomez, executive director of The Asia Rice Foundation, a regional research center. “But I think she might have gone a bit too far.” As one of the world's biggest importers of rice, the Philippines has had to take action to secure supply of its national staple ahead of a traditional lean period in the third quarter. Manila, which imports around 10 percent of its annual requirement, aims to have a 30-day stockpile in July-September but as of March 20 government reserves only covered two weeks. Arroyo, who has faced long-running allegations of corruption and vote fraud, is renowned for reacting forcefully to threats against her and the potential rice risk was no different. Earlier this year, she contacted the Vietnamese Prime Minister Nguyen Tan Dung to secure a supply of up to 1.5 million tons of rice for this year, stealing a march on other importing nations now facing export curbs by Hanoi and India. She has also promised more funding to farmers, vowed to crack down on hoarding and plans to effectively remove an import tariff for private buyers. But in a move viewed as alarmist by some analysts, Arroyo also asked fast-food joints to start selling half portions of rice and deployed soldiers armed with M16s to supervise government sales of the grain. A spokesman for the National Food Authority (NFA), the grain-importing arm of the state, admitted this week that security measures such as marking the fingers of buyers of cheap government rice with indelible ink to ensure they don't buy more than their allotted amount, had scared some people. “We want our distribution to be convenient and not intimidating for poor families,” Rex Estoperez of the NFA told local radio this week. The government's very public campaign to ensure supply has created a sort of artificial crisis with poorer people queuing for hours in the heat to stockpile state-subsidized rice. Manila's more frequent rice tenders have also boosted international prices, which in some cases have more than doubled this year, hiking the government's import bill and the cost of subsidizing the grain. The Philippines has said it wants to import up to 2.2 million tons of rice for this year, which would be its biggest purchase of the grain in a decade. So far, it has bought 1.2 million tons and is holding a tender for 500,000 tons on April 17. “They are kind of fanning the fire,” said one Manila-based trader of the government's measures. “I would interpret the series of tender schedules as panicky.” “If you are an ordinary Filipino from the surface it seems like something is wrong, like we are running out. But from where I sit, I think it's a case of them making sure that everybody gets something.” The rice crisis is also putting pressure on the country's finances. In a recent research note, investment bank Credit Suisse calculated that the government could lose up to $1.3 billion or 0.7 percent of Gross Domestic Product (GDP) this year by importing up 2.6 million tons of rice at climbing world prices and selling it at lower prices domestically. Having whipped up consumer fears with her efforts to be visibly on top of the situation, the best way for Arroyo to calm them down is to ensure adequate supply and to tone down the government's more extreme responses, analysts say. “I think it's a confidence game at this juncture,” said Song Seng Wun, economist with CIMB-GK Research in Singapore. “You cannot fight fear sometimes with just trying to explain things out.” __
