April 5, 2018
The government must continue to be proactive in maintaining price stability and cushioning the impact of higher consumer prices on the poor following the uptick in inflation in March 2018, the National Economic and Development Authority (NEDA) said.
The country’s headline inflation reached 4.3 percent – breaching the government’s full-year inflation target of 2.0 to 4.0 percent. This is higher compared to the rates recorded in the previous month and during the same period last year.
The higher inflation rate was driven by the continuous acceleration of key commodity items since the start of the year: alcoholic beverage and tobacco (18.6%), food and non-alcoholic beverages (5.9%), and housing, water, electricity, gas, and other fuels (2.9%).
NEDA Officer-in-Charge (OIC) and Undersecretary for Policy and Planning Rosemarie G. Edillon said that proactive measures will be vital in managing inflation and mitigating its impact especially on the poor.
“The government remains vigilant to price pressures, especially on food consumed by the poor such as rice,” she said.
Prices of rice rose by 3.6 percent in March, from 2.8 percent in February. Farm gate prices of palay have been on an upward trend since the second week of January, which in part, contributed to higher wholesale and retail prices of rice.
Edillon cited the urgency to fast-track the amendments of Republic Act 8178 or the Agricultural Tariffication Act, which will remove the quantitative restrictions on rice importation, and eventually open imports to private traders and allow the National Food Authority to focus on ensuring buffer stocks for rice.
“Without this measure, containing food inflation pressures will be a challenge given the diminishing rice stocks,” Edillon said.
The country’s total rice inventory, inclusive of stocks from households, commercial warehouses, and National Food Authority (NFA) depositories, registered a marked drop to 1,795.78 thousand metric tons (MT) as of February 1, 2018. Although, the 250,000 MT of imported rice scheduled to arrive next month will momentarily boost the NFA stockpile, this will not be able to meet the country’s rice demand in the succeeding months, Edillon said.
Edillon said inflationary pressures from other agricultural food items must be managed as well, while at the same time anticipating developments in international oil markets. “Given the risks, we really need to be anticipative and proactive in implementing measures to ensure price stability and cushion the impact of higher consumer prices on the poor,” Edillon said.
Edillon is currently the OIC of NEDA while Socioeconomic Planning Secretary Ernesto Pernia is on official travel abroad.