By Chino S. Leyco
The Department of Finance (DOF) said the continued downward trend in the growth of consumer prices was reflective of the government’s “decisive efforts” to keep inflation at a manageable level.
One such measure that significantly contributed to the record-low inflation rate was the enactment of the Rice Tariffication Law (RTL) or Republic Act (RA) No. 11203, said the DOF’s Strategy, Economics and Results Group (SERG) in a report.
It said the lifting of quantitative restrictions (QRs) on rice imports helped increase the domestic supply of the staple, thereby pulling down retail prices by P7 to P10 per kilo and benefitting most especially poor Filipinos who spend about 20 percent of their total household budget on rice.
SERG issued this statement as the country’s inflation rate decelerated further to 1.7 percent in August, or the lowest rate since October 2016. This brings the year-to-date average inflation to 3 percent, or well within the government’s target range of 2 to 4 percent.
The inflation of rice decelerated at -5.2 percent year-on-year, the lowest ever recorded and the fourth consecutive month of a negative rate.
At the household level, the August inflation rate means an additional spending of just P1.70 for every P100 spent in the same month last year.
Had rice inflation remained flat YOY, the additional spending would have been P2.20 for every P100.
This was further validated in a report by Jose Sosa of the Bulacan Consumer Affairs Council, Inc. during the Malacañang economic press briefing last Sept. 4.
According to the consumer group leader, local-milled rice in Sta. Maria, Bulacan now costs only P25 to P32 per kilo.
This downtrend is expected to help reduce poverty incidence, malnutrition, and hunger in the medium-term as more Filipino families gain access to affordable and high-quality rice, said SERG.
As of 31 August, the government has raised P9.2 billion in Customs duties from 1.5 million metric tons (MT) of rice imported by the private sector under the new tariffication regime as put in place by RA 11203.
The tariff revenues from the rice imports are being utilized to boost our local farmers’ productivity and global competitiveness through the Rice Competitiveness Enhancement Fund (RCEF), which RA 11203 has set up with an annual allocation of at least P10 billion.
Of the P10-billion RCEF fund, P5 billion will go to rice farm machineries and equipment to be administered by the Philippine Center for Postharvest Development and Mechanization, and P2 billion to the production of high-yield seed varieties by the Philippine Rice Research Institute (PhilRice).
About P2 billion was also released to skills training programs of Technical Education and Skills Development Authority (TESDA) and P1 billion to credit facilities via the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP).
Should tariff collections exceed P10 billion, the excess amount shall also be utilized for similar intervention programs to boost rice farmers’ productivity.
SERG called on the Department of Agriculture to fast-track the provision of rice farm machineries and equipment distribution, high-yielding seed development, expanded credit assistance, and extension services under the RCEF to help our local rice farmers be more competitive.
The government will stay on course towards a more competitive rice sector and a robust economy, which will translate into a comfortable life for all Filipinos as envisioned by President Duterte, SERG said.