The expansion of RPS units is central to ensuring stable rice supply and competitive prices. Critics warn about possible overcapacity in the milling sector, but Tiu Laurel downplayed the risk, stressing that utilization rates matter more than rated capacity.
Utilization rate targeted at 80-85%
“More important than rated milling capacity is capacity utilization,” Tiu Laurel said. “To break even, operators need at least 63 percent capacity usage. Go below that, and you’re losing money.”
He added that full capacity often signals monopolistic conditions.
“Our target utilization rate is 80 to 85 percent. That’s where efficiency improves, costs go down, and all parties—millers, farmers, and consumers—benefit, provided other costs hold steady.”
The big picture
Once mill usage stabilizes at the optimal range, PHilMech could shift investments from post-harvest infrastructure to production-side equipment such as tractors and seeders.
This would support the National Food Authority, whose milling and drying capacity has been greatly reduced since the 2019 Rice Tariffication Law (RTL).
By the numbers
Since RTL’s implementation and the rollout of the Rice Competitiveness Enhancement Fund (RCEF), PHilMech has built 122 RPS units with advanced multi-stage mills and dryers.
116 units were completed under the Marcos administration.
For RCEF Phase 1, the goal is 151 units, with the last 29 due before year-end.
Over 1,000 small-scale mills and 500 standalone dryers have also been distributed to cooperatives and local groups.
The bottom line
Tiu Laurel’s strategy prioritizes smart utilization to avoid idle infrastructure, stabilize prices, and protect farmer incomes.
It underscores a shift from unchecked expansion toward measured growth, productivity, and resource stewardship. —Ed: Corrie S. Narisma
