Inflation rate safe amid halt in rice importation

Farmers have complained about the big drop in farm-gate price of rice, which has declined to just about PHP15 per kilo from about PHP20 per kilo previously since the implementation of the tariffication law last March. (File Photo: Eduardo Prim/Unsplash)

MANILA — Inflation is not expected to be affected by President Rodrigo R. Duterte’s directive to stop rice importation during the harvest season.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the President’s directive is not expected to have any effect on the rate of price increases since rice supply will not be constrained because there are still rice imports that have yet to be delivered into the country.

“That’s only temporary,” he said referring to the President’s instruction to purchase harvests of local farmers to address their plight vis-à-vis the impact of the rice tariffication law implementation.

Farmers have complained about the big drop in farm-gate price of rice, which has declined to just about PHP15 per kilo from about PHP20 per kilo previously since the implementation of the tariffication law last March.

The government pushed for rice tariffication to ensure adequate rice supply, a staple food in the country, especially after the supply issue in 2018 that resulted in big jumps of domestic inflation rate.

After peaking at 6.7 percent in September and October 2018, inflation rate decelerated to 0.8 percent last October due to the implementation of monetary and fiscal measures.

Inflation rate in the first 10 months this year averaged at 2.6 percent, at the lower half of the government’s 2-4 percent target.

Last week, BSP’s policy-making Monetary Board slashed the central bank’s average inflation forecast for this year to 2.4 percent from 2.5 percent previously, but expects upticks starting November as base effect dissipates.