October 4, 2019
The National Economic and Development Authority expects inflation to further ease in the near term due to higher supply of rice in the country allowed by the Rice Tariffication Law (RTL).
The Philippine Statistics Authority reported today that the country’s headline inflation slowed further to 0.9 percent in September 2019, the lowest rate in 40 months.
This can be attributed to softer price adjustments observed in nearly all commodities and base effects, coming from 6.7 percent in the same period in 2018.
Also, this brings the year-to-date inflation to 2.8 percent, which is well within the government’s full year 2019 inflation target of 2.0 to 4.0 percent.
Food and non-alcoholic beverages posted deflation at 0.9 percent while non-food inflation moderated to 1.6 percent.
Rice deflation was observed for the fifth consecutive month, reaching an 8.9-percent decline in September 2019 from a 5.2-percent drop in the previous month.
“We see the Rice Tariffication Law continuing to help pull down overall inflation in the near term as it continues to help improve rice stock inventory of the country. This access to cheaper rice is good for Filipino consumers,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
Rice stock inventory increased by 40.3 percent in August 2019 due to higher importation of rice.
He also noted that prices of retail and wholesale rice already fell by 6.0 to 8.0 percent or about PhP3/kg since RTL’s enactment in March 2019.
“While consumers enjoy lower rice prices, we must at the same time protect the Filipino farmers from falling palay prices. The government must fast-track and prioritize programs and projects under the Rice Competitiveness Enhancement Fund to boost production and improve profitability of the Filipino farmers,” Secretary Pernia noted.
A joint resolution to help protect the farmers from falling palay prices is pending approval in Congress.
The resolution directs several government agencies and LGUs to buy rice from local producers for their rice subsidy programs.
The Department of Agriculture and the Philippine Competition Commission are also conducting an investigation on anti-competitive practices to ensure that there is no collusion among millers and traders and to ensure that rice prices are acceptable both for the consumers and farmers.
“We are also on the lookout for upside risks to inflation that may emanate from the reported cases of African Swine Fever in the country and volatility in international oil prices poses,” said Pernia.