Ahead of inflation release, gov't ramps up rice production measures

MANILA, Philippines — As the release of December's inflation figures approaches on January 5, forecasts, including insights from AB Capital Securities, point towards an anticipated 4.1% inflation rate for December.

"Economic managers are focused on hitting and maintaining inflation within the Central Bank's target range," the stockbroker said.

Meanwhile, the Department of Agriculture (DA) has set aside P30.8 billion from the 2024 budget for the National Rice Program (NRP).

The amount has increased from last year and is aimed at boosting rice production, especially for an expected long dry period. 

"The allocation breakdown includes P24.11 billion for production support services, P1.01 billion for irrigation network services, and P2.04 billion for extension support, education, and training services," AB Capital Securities said.

The budget is separate from other funds designated in the 2024 General Appropriations Act for rice-related programs and local projects helping palay producers, the stockbroker added.

As rice contributes to nearly 9% of the nation's consumer price index, AB Capital Securities said that the government is doubling down on efforts to secure a consistent and substantial rice supply. 

"The global price of rice is near 15-year highs amidst concerns of El Niño and export bans from major rice producing countries," AB Capital Securities said.

In December's second phase of the inflation survey, the average price of well-milled rice per kilogram rose by 3.32% from the previous month.

Philippine Statistics Authority Undersecretary Dennis Mapa previously noted that prices of regular, well-milled and special rice increased across the board month-on-month, driving up rice inflation. 

AB Capital Securities said that the government needs to take proactive steps to stabilize consumer prices and overcome potential challenges.