Rice contribution to inflation grew tenfold – DOF

Basic food items, such as rice, fish, meat, and vegetables, have been major drivers of infla!on this year with the contribu!on of rice rising 10 !mes to 1 percentage point of the infla!on rate, the Department of Finance (DOF) said in a statement yesterday.

According to the Philippine Sta!s!cs Agency (PSA) data, rice was the number one contributor to infla!on last month, while food items in the consump!on basket accounted for more than half of the infla!on rate in the same month.

In its presenta!on during the latest Cabinet mee!ng, the DOF bared that in contrast, the contribu!on of non‐food items, such as electricity, gas and other fuels, has slowed down since July this year.

“Rice tariffica!on reforms in food and policy are needed to address the repeated rice supply problems,” Finance Secretary Carlos Dominguez III said during the Cabinet mee!ng.

According to the department, the rice tariffica!on bill, once passed into law, is expected to liberalize the importa!on of rice in the country and help reduce rice prices while providing enough support for local farmers who will be affected by the influx of cheaper rice imports.

This measure has been cer!fied as urgent by President Duterte. Economic managers said liberalizing rice imports will reduce the retail price of rice by P2 to P7 per kilogram, based on latest es!mates, and reduce infla!on rate by 0.4 percentage points.

Among the short‐term measures recommended by the DOF during the mee!ng were for the Department of Agriculture (DA) to undertake steps to bring down food prices, and for the departments of social welfare and transporta!on to speed up the release and distribu!on of cash cards to the poorest households and fuel subsidy cards to operators of public u!lity vehicles, respec!vely.

The release of uncondi!onal cash transfers by the social welfare department and fuel subsidies through the Pantawid Pasada Program are among the social mitigation measures under the Tax Reform for Acceleration and Inclusion Act that are meant to cushion the impact of inflation on vulnerable sectors.