High rice supply slows down inflation to 0.9%

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 Plan

ning 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 13 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.