CHAPTER IV

PRESENTATION, ANALYSIS AND INTERRPETATION OF DATA

This study aims to explain the factors affecting pricing decision of milled

rice in the Philippines. Specifically, it seeks to provide answers to the following

objectives:

1. Pricing trend of milled rice from 2008-2018?

Wholesale and retail price of well-milled rice from 2007-2019

Wholesale Retail

44.99
42.32
42.04 41.72 42.14

36.87
35.3
34.12 34.34 34.73
32.71

24.72
41.85
39.51 38.14
37.83 38.82
34.49
31.45 32.06 32.82
29.81 31.17

22.59

0.00
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 Table shows the wholesale and retail price trend of rice in the Philippines.

The table above portrays that the overall trend in terms of wholesale and retail

price continually increase up to present. From 2007 to 2008 there was a sudden

increase in both wholesale and retail prices, the increase was due to the

international crisis on the price of rice.

In 2008 price of rice was stabilized due to Japan unlocking its massive

hidden supply of rice, these supply is rice that Japan imports which cannot be re-

exported under an agreement with US. 2009 to 2012 posted no significant

change but the price gradually increases as a trend.

In 2013 there has been a slight increase in price of rice due to damages

brought by typhoon Yolanda in the country.

 In 2014 spike in the price of rice was significat due to another

typhoon,Glenda, hitting the country after last year’s typhoon.

In 2015 the price of rice slightly went down for the reason of adequate

supply in the market enabling the price to go down and stabilize.

Price of rice start to gradually increase again in the year 2016, starting the

term of newly elected president Rodrigo Duterte. The president ordered a

temporary halt in the importation of rice resulting to slight increase in the price of

rice.

In 2018 the price of rice in the country has increased for eighth month

straight and hit a three-year peak, despite the injection of rice imports. Philippine

rice crisis escalates due to shortage in supply pushing prices upward.

2. How does the following factors be described:

2.1. Supply;

Value of supply of rice from 2007-2019

16,761

16,256 16,317
16,010

15,601 15,618
15,465
15,322 15,332
15,027 15,042 14,981
14,679

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 Table 4.2.1 shows the trend of total supply of rice of the Philippines for the

period of 11 years. It can be seen that total supply varies each year and annual

supply fluctuates from 2007-2013 and an increase from 2013-2015 but a

significant decrease on supply on year 2016 and continue to increase from 2016-

2018. Significant increase in the total supply of rice from 2013-2015 is brought by

President Benigno S. Aquino III as he declare 2013 as National Year of Rice and

directed the Department of Agriculture (DA) to lead its celebration, as per

Proclamation No. 494, signed on October 18, 2012. The NYR proclamation aims

to intensify efforts of the Aquino government through the DA to attain rice self-

sufficiency by 2013. In year 2007, the lowest total supply was recorded because

of the low production of domestic rice in the market. In year 2018, the highest

total supply was recorded because of President Rodrigo Duterte decided to lift
the restrictions on rice importation and the same time domestic farmers continue

to produce more domestic rice in the market.

Moreover, the government struggle to solve the country’s problem on the

supply on rice as the country's number one staple food, rice (Gavilan 2015).

Different agencies and campaigns have been established to help the famers to

adapt to different obstacles they’re facing to provide rice for everyone (Gado

2013). As the current administration nearing the end of its term, they try to

execute different campaigns which may result to an affordable price and stable

supply of rice in the Philippines.

2.2. Consumer Price Index

Consumer Price Index from 2007 to 2019

171.62 173.46 171.61 174.58 174.12 176.82

159.63
153.75
146.44 147.51

123.49 127.66
120.87

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 Figure shows the trend of Yearly Average Consumer Price Index (CPI) in

the Philippines for the period of 12 years. The trend of CPI continually increase

from 2007-2010. A decrease in CPI on 2012 was caused by the fall of inflation

that year which were driven by the fall of price by different commodity groups.

Another significant fall of CPI was observed in the year 2018 it was due to the fall

of inflation rate caused by the decrease in price of oil and other commodity

groups.

2.3. Import;

Value of Import of Rice (in metric tons) from 2007-2019

2,432.85 2,379.11

2,006.35
1,805.61 1,755.18
1,481.50

1,042.14 1,089.14
888.09 844.32
707.67
609.36
399.08

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 Table 4.2.3 shows the trend of import of rice in metric tons from 2007-

2019. The trend of importation of rice fluctuated from 2007-2010. Under the

administration of Gloria Macapagal Arroyo, over her last three years of being the

President of the Philippines, lead to over importation (Alave,2011). The

Philippines in that time became the world’s top importer which resulted that the

country was directly affected by the crisism (Evangelista, 2018). After the

administration of Arroyo, it declined from 2379.11 to 707.67 in metric tons that

considered to be the greatest declined from 2007-2019. According to Benigno

Aquino the reason behind the declined period, was the government had to pay

extra warehouses to store the 2.379.11 metric tons of rice so that the government

must cut down the estimated yearly shortage. In 2013, according to agricultural

sector, it declined again from 1,042.14 to 399.08 because the agricultural sector

wanted to be still on track of being self-sufficient in rice and to lessen the way of

importing rice from other country. From 2013 to 2015, importations of rice

continue to increase up to 1,481.50 metric tons and declined again in 2016. And

from 2016 until 2018, under the administration of President Duterte, the

importation continues to increase.

2.4. Export;
 Value of Export of Rice (in US dollars) from 2007-2019

513,441.00

348,000.00
335,122.00

268,126.60 268,126.60
241,135.00
223,840.00
202,000.00 192,000.00
152,000.00
127,000.00

26,454.00
12,178.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

This table shows the trend of the exportation of rice of the Philippines for

the period of 2007-2018. The trend in exportation fluctuated from 2007-2009.

Year 2008, was the lowest record of exportation of rice. In 2010, it started to

increase until 2011 with the highest record of 513,441.00 in US dollars in

exporting of rice from the Philippines. From 2013-2015, the exporting of rice

declined continously.

2.5. Exchange Rate; and

Value of Exchange Rate from 2007-2019

52.661
50.404 52.208
47.637 47.492
46.148
44.475 45.110
43.313 42.229 42.446 44.395 45.503

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 Table 4.1.3.2 shows the trend of the real exchange rate of the Philippines

for the period of 12 years. The trend in real exchange rate fluctuated from 2007-

2019. A decrease in real exchange rate from 2009-2011 was caused by the grim

global economic outlook along with high inflation and widening current account

deficit. In year, 2008 the real exchange rate declined due to the increase in

export taxes.

2.6. Inflation rate

Value of Inflation Rate from 2007-2019

9.31

4.76
4.11
3.61
3.23
3.01 2.85
2.78 2.58

1.25 1.14
0.67 0.75

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 The trend of the inflation rate of the Philippines for the period of 12 years.

The trend in inflation rate fluctuated from 2007-2019. A spike on inflation occured

in 2008 due to higher prices in the heavily weighted food, beverages and tobacco

index. Philippines as a major importer of rice was affected by the worldwide

increase in the price of rice during 2008 pushing the inflation rate upward. The

figure shows that the lowest rate of inflation is in the year 2015 the fall was due to

afordable supply-side factors such as relatively lower domestic retail prices of

corn, oil, and rice; lower international oil prices; and the contraction in the prices

of housing and other utilities.

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Wholesale price 13 22.59 43.23 34.9054 5.69511
Retail price 13 24.72 46.80 37.9077 6.08419
inflation 13 .67 9.31 3.0808 2.26839
Exchange rate 13 42.23 52.66 46.4632 3.46956
Supply 13 14679.00 16761.00 15570.0769 611.52534
Import 13 399.08 2432.85 1341.5692 679.94053
Export 13 12178.00 513441.00 223801.7846 134065.16136
Consumer Price
13 120.87 176.82 155.5040 20.76086
Index
Valid N (listwise) 13

Pricing variables of rice in the Philippines in terms of supply, import, export,

exchange rate, inflation rate, and consumer price index. The price of rice had

been increasing steadily from 2007-2018 with its minimum, maximum, mean, and

standard deviation being 22.59, 43.23, 34.9054, 5.69511, in wholesale price

respectively and 24.72, 46.80, 37.9077, 6.08419, in retail price respectively. The

country's inflation rate recorded their lowest rate on 2015, 0.67 and highest rate

on 2008, 9.31. This variables's minimum, maximum, mean, and standard

deviation is .67, 9.31, 3.0808, 2.26839, respectively. In exhange rate of the

Philippines, the mean, median, mode and standard deviation is 42.23, 52.66,

46.4632, 3.46956, respectively. The trend in supply varies each year and this

variable's minimum, maximum, mean, and standard deviation, 14679.00,

16761.00, 15570.0769, 611.52534 respectively. Being the world’s top importer,

recorded that by 2008 it was the highest and in 2013 was the lowest. This

variables's minimum, maximum, mean, and standard deviation, 399.08, 2432.85,

1341.5692, 679.94053, respectively. The minimum, maximum, mean, and

standard deviation of exportation of rice is, 12178.00, 513441.00, 223801.7846,

134065.16136, respectively. The consumer price index’s minimum, maximum,

mean, and standard deviation, 120.87, 176.82, 155.5040, 20.76086, respectively.

3. What is the effect of the factors to the pricing decision of milled

rice?
 Table

Effect of factors to the pricing decision of milled rice (retail)

Unstandardized Standardized

Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -80.501 23.542 -3.419 .014
inflation -.217 .447 -.081 -.486 .644
Exchange rate .171 .352 .097 .484 .646
Supply .007 .002 .737 4.157 .006
Import -.005 .002 -.567 -2.649 .038
Export -1.090E-5 .000 -.240 -1.206 .273
Consumer Price Index .040 .041 .137 .971 .369
a. Dependent Variable: retail price
b. P-value= 0.006, fstat=10.596
c. Rsquare= 0.914

It showed that supply in retail had the most impact on price of rice with a

significant value of 0.006 and the other variable which had notable effect on price

of rice were import in retail with a significant value of 0.038.

 Table

Effect of factors to the pricing decision of milled rice (wholesale)

Standardize

Unstandardized d

Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -76.173 23.232 -3.279 .017
Inflation -.192 .441 -.076 -.434 .679
Exchange_rate .099 .348 .060 .283 .786
Supply .007 .002 .764 4.086 .006
Import -.005 .002 -.562 -2.491 .047
Export -9.019E-6 .000 -.212 -1.010 .351
Cpi .030 .041 .110 .740 .487
a. Dependent Variable: wholesale price
b. P-value=.008, fstat=9.433
c. Rsquare= .904

It showed that supply in wholesale had the most impact on price of rice

with a significant value of 0.006 and the other variable which had notable effect

on price of rice were import in wholsale with a significant value of 0.047.

 4. Which of the following factors contribute most to the pricing of milled

rice?

Table

Factor that greatly contribute most to the pricing of milled rice (retail)

Standardize
Model
Unstandardized d

Coefficients Coefficients
B Std. Error Beta t Sig.
1 (Constant) -87.764 19.330 -4.540 .001
logsupply .008 .001 .845 6.755 .000
logimport -.004 .001 -.434 -3.470 .006
a. Dependent Variable: retail price
b. P-value=.000, fstat=27.159
c. Rsquare=.845

It showed that supply had the most impact on price of rice on retail with

the highest t-stat absolute value of 6.755 the other variable which had notable

effect on price of rice were import with with t-stat values of -3.470 respectively.

Table

Factor that greatly contribute most to the pricing of milled rice (wholesale)
 Unstandardized Standardized

Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -82.409 17.581 -4.687 .001
logsupply .008 .001 .844 6.942 .000
logimport -.004 .001 -.448 -3.687 .004
a. Dependent Variable: wholesale price
b. P-value=.000, fstat=29.059
c. Rsquare=.853
It showed that supply had the most impact on price of rice on wholesale

with the highest t-stat absolute value of 6.942 the other variable which had

notable effect on price of rice were import with with t-stat values of -3.687

respectively.

5. What information may be developed based on the findings?

Statistical treatment

Mean

Standard deviation

Multiple Regression