By Chino Leyco
The rate of increase in consumer prices settled at its slowest pace in more than three-years last month as sustained inflows of imported rice continued to pull down the retail cost of the Filipino staple food.
The Philippine Statistics Authority (PSA) reported Friday that headline inflation clocked in at 0.9 percent in September, slower compared with 1.7 percent in August and way below the 6.7 percent registered in the same month last year.
The latest inflation figure brought the first nine-month average to 2.8 percent, well within the government’s full year target of 2.0 percent to 4.0 percent.
Socioeconomic Planning Secretary Ernesto M. Pernia said the further easing of inflation was due to higher supply of rice in the country following the implementation of the rice tariffication law.
Based on the PSA report, rice remained at a deflation rate of 8.9 percent in September, its fifth consecutive month of decline. It also slowed further from the previous month’s -5.2 percent.
Rice stock inventory, likewise, increased by 40.3 percent due to higher importation of rice.
“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,” Pernia said in a statement.
Pernia also noted that prices of retail and wholesale rice already fell by 6.0 to 8.0 percent or about P3 per kilo since the law’s enactment in March this year.
While the rice tariffication measure benefited the bulk of Filipino consumers, Pernia admitted it also resulted in falling palay prices that adversely affect local farmers.
“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,” said Pernia, the government’s chief economist.
A joint resolution, which directs several government agencies and local government units to buy rice from local producers, is now pending in Congress that once implemented, should help protect the farmers from falling palay prices.
Aside from rice, prices of corn and vegetables also decreased year-on-year in September by 4.1 percent and 4.7 percent, respectively. Sugar, jam, honey, chocolate and confectionery also saw a 4.1 percent drop in prices.
Meat prices, however jumped 2.4 percent last month despite concerns over the African swine fever (ASF) along with fish that rose by 1.4 percent.
The drop in prices of major food items like rice contributed to the annual rate of decrease in the index of the heavily-weighted food and non-alcoholic beverages, which also settled at 0.9 percent.
Transport cost index likewise declined further by 0.9 percent.
Slower price increases were also posted in clothing and footwear (2.7 percent), housing, water, electricity, gas, and other fuels (0.8 percent), communication (0.2 percent), recreation and culture (1.4 recent), as well as restaurant and miscellaneous goods and services (3.0 percent).
On the other hand, inflation of alcoholic beverages and tobacco index moved up further by 14.3 percent in September.
How regions fared
In Metro Manila, inflation also eased further to 0.9 percent from 1.4 percent the previous month and 6.3 percent a year before. Transport cost in the capital fell 2.2 percent, while slower annual hike was seen in food and non-alcoholic beverages (0.5 percent).
Inflation in areas outside Metro Manila, meanwhile, slowed down further to 0.9 percent last month from 1.8 percent in August and 6.8 percent in the same month last year.
In the provinces, Zamboanga Peninsula registered a deflation of 1.3 percent, while the highest region of Mindoro, Marinduque, Romblon and Palawan has the highest inflation in the country at 2.2 percent.
Food and non-alcoholic beverages posted deflation at 0.9 percent while non-food inflation moderated to 1.6 percent.
“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,” Pernia said.