November 6, 2018

Following nine consecutive months of increase in the prices of goods, the government’s economic team is glad to report to the public that the country’s inflation rate is pointing towards a downward path.

The Philippine Statistics Authority said that, while the year-on-year headline inflation in October 2018 was steady at 6.7 percent, seasonally adjusted month-on-month inflation eased further to 0.3 percent. Last month’s adjustments in the overall price level in Metro Manila alone slowed down further to 6.1 percent, while inflation outside Metro Manila remained at 6.8 percent.

Concerted government efforts, as prescribed in Administrative Order 13, to tame the prices of goods in the previous months have finally resulted in expected outcomes. And such promising results further motivate the economic team to work closely with all concerned government agencies to more aggressively implement mitigating measures to ease inflation over the medium- and long-term.

As always, the economic team is mindful that much attention has to be given to food, which remains to be the major contributor to inflation even as its price decelerates. To hasten the decline in consumer prices, the government must continue enforcing mitigating measures, particularly interventions in the food supply, one of which is rice.

To compensate for the lost harvest in typhoon-affected areas, rice imports should be closely monitored to ensure that their arrival is timely and sufficient.

The country’s rice imports, along with the rice inventory of the National Food Authority (NFA), continue to improve with the completion of the Philippines’ government-to-government procurement and the first phase of 2018 Minimum Access Volume.

The National Single Window System has to be efficiently operationalized to ensure fast and efficient processing of imports. Restructuring the NFA would also bode well for the further streamlining of the processes of rice importation.

We also call on concerned government agencies, especially the Department of Agriculture, to speed up initiatives to distribute seed buffer stocks for rice, as well as corn and other high-value crops, in disaster-stricken areas in time for the planting season this November to January.

Interventions in rice production should be supported by policies that will further ease food supply, which remains crucial as demand for food items is expected to increase with the onset of the holiday season. Congress must pass the long-overdue amendments to the Agricultural Tariffication Act, which is expected to reduce rice prices by PhP2.00 to as much as PhP7.00 per kilo.

Other regions of the country should be tapped to cover for the limited supply of other key agricultural products while farm areas in Luzon are still undergoing recovery. Releasing of essential food items from ports, relaxing the Metro Manila Development Authority’s truck ban – particularly for the delivery of food – and increasing the number of retail outlets for agricultural products and basic commodities should be prioritized.

Setting our sights on longer horizons, more should be done to ensure price stability of food products. The government needs to pay closer attention to the agriculture and fisheries sector to significantly increase productivity and to be more competitive and resilient to weather-related and man-made shocks.

We ask the Filipino people, especially the private sector, to support the government’s initiatives to improve the quality of life for all—as the economic team remains committed to its task of maintaining a stable price environment to sustain our country’s economic growth.