Inflation dips to 3-year low
Lower prices of electricity, fuel, as well as food and non-alcoholic beverages and also contributed to the slide in prices
The inflation rate settled at 1.7 percent in August, which was the lowest growth in prices of basic services and commodities in a month for the past three years.
The figure was the lowest since October 2016 when the inflation rate was at
1.8 percent, coming from 2.4 percent in July and from a high of 6.4 percent in August 2018.
The August figure brings the average inflation for the year at 3 percent and was within the government’s target range of 1.3 percent to 2.1 percent.
The Philippine Statistics Authority (PSA) noted the substantial 5.2 percent slide in the average retail prices of rice.
Lower prices of electricity and fuel, as well as food and non-alcoholic beverages, also contributed to the slide in prices.
Grains cost down
Contributing to the stabilized prices is the cost of corn that declined 3.7 percent, while sugar, jam, honey, chocolate and confectionery prices fell 2.9 percent.
National statistician Dennis Mapa noted that August was the fourth month that the price index for rice slid to negative.
For the second week of August alone, PSA data stated that average retail price for regular milled rice was down 9.8 percent annually to P38.38 per kilogram.
While retail prices have been on the downtrend, a point of concern remains as farmers, particularly in Luzon, suffer from falling palay (unhusked rice) farmgate prices to compete with cheaper rice imports enabled by the Rice Tariffication Law (RTL).
August inflation in the National Capital Region (NCR) was slower at 1.4 percent from 2.3 percent in July and 7 percent in August last year.
On the other hand, inflation in areas outside of NCR was a notch higher than the national average at 1.8 percent, but was still down from 2.4 percent in July and 6.2 percent a year ago. The Zamboanga Peninsula had the lowest inflation at 0.5 percent, while inflation in the MIMAROPA region was the highest at 4.6 percent.
Buy ‘palay’
To help cushion the impact of rice tariffication on local farmers while keeping prices low, President Rodrigo Duterte has directed the National Food Authority (NFA) to buy unhusked grains, or palay, from them to aid in their financial recovery brought by low farmgate prices.
“In a democracy, officials are elected and their duty is to do for the greatest good for the greatest number. You have seen people going wild, others hungry because there is no rice,” the Chief Executive said in a news conference in Malacañang last Wednesday night when asked to respond to the sentiments of rice farmers.
“What the solution should be or will be for the Secretary of Agriculture is to buy all,” he added.
Farmers from the Ilocos and Central Luzon regions lamented how prices of the food staple dipped from P21 to P7 per kilo.
They pinned the blame on the enactment of the RTL that removed import quantitative restrictions on rice imports.
Mr. Duterte, however, insisted that the charter was put in place “for the greater interest of the majority of the people.”
Tapping the NFA to buy rice from local farmers, asserted the President, is one way of helping them stay afloat.
Rice for poor
“You arrive at a compromise of how much you are willing to lose a little bit. Let’s try to equal it, as long as they won’t lose much profit and ensure they are compensated for their hard work,” he stated.
The Department of Agriculture has also proposed the distribution of rice to families under the government’s Conditional Cash Transfer program for farmers to have another source of income.
Under the initiative, with the Department of Social Welfare and Development (DSWD) in tow, instead of giving 4Ps beneficiaries a monthly P600 rice subsidy, rice grains will be distributed instead.
The DSWD will be required to purchase rice from local government units that directly buy grains from farmers and the NFA.
Once rolled out, the said program would initially benefit around 100,000 of an estimated two million farmers with lands one hectare and below being tilled for rice planting.
Jobs level up
Meanwhile, the unemployment rate fell to 5.7 percent in July resulting to 2.3 million additional Filipinos securing a job during the month.
The total number of Filipinos working rose to nearly 43 million on the back of higher labor demand in services and agriculture.
Labor participation rate was at 62.1 percent given the portion of the population aged 15 years old and over that makes up 73.1 million Filipinos. Underemployment rate fell to 13.9 percent from 17.2 percent last year, while unemployment rate remained at 5.4 percent, the lowest of all July rounds of PSA’s Labor Force Survey since 2009.
“The government must continue encouraging the private sector to increase employment opportunities for young people, supporting technical vocational training, promoting apprenticeship and on-the-job training programs among the youth,” National Economic and Development Authority Undersecretary for Policy and Planning and current officer-in-charge Rosemarie Edillon said.
The August figure brings the average inflation for the year at three percent and was within the government’s target range of 1.3 percent to 2.1 percent.
Inflation in areas outside of NCR was a notch higher than the national average at 1.8 percent.