NEDA chief: El Niño, inflation a dangerous combination

MANILA, Philippines — A “dangerous combination” of El Niño and inflation is threatening to push more people to poverty, the National Economic and Development Authority (NEDA) yesterday said, as it assured the public that the government is working to protect the vulnerable sectors from its impact.

NEDA chief Arsenio Balisacan said El Niño, which is likely to hit the Philippines in the latter part of the year based on forecast of the weather bureau, is expected to lower the production of the agriculture sector.

“What we want to ensure is that we can mitigate the negative effects of El Niño. We can start planning and putting the necessary adjustments now to reduce the negative effects, while at the same time, already making arrangements for the necessary support for those who are most exposed, particularly the vulnerable groups,” Balisacan said in a press briefing at Malacañang.

“With the inflation, the elevated inflation that we have now, if we are unable to reduce that inflation, and then you get this El Niño phenomenon, that is a dangerous combination and we want to prevent that from happening,” he added.

Balisacan said mitigating the impact of inflation and El Niño is part of the social protection measures the government would undertake to prevent people from falling into poverty.

“Once they fall, it’s extremely difficult for them to go up and we don’t want that,” the socioeconomic planning secretary said.

Inflation slowed down to 7.6 percent in March from 8.6 percent in February. Earlier this week, NEDA said it expects inflation – the rate of increase in the prices of goods and services – to be within the two to four percent target this year.

“We are actively monitoring the situation and implementing the necessary measures to ensure that by the end of the year, we should be on our target of roughly around four percent and at 3.5 to four percent. So we are on that downward trajectory already,” Balisacan said.

Marcos has directed agencies to create an El Niño team so they can effectively address the impact of the phenomenon.

Drop in rice prices

After weeks of spikes, meanwhile, retail prices of rice are expected to drop by P6 per kilo by August largely due to lower production cost, farmers’ group Samahang Industriya ng Agrikultura (SINAG) said yesterday.

In an interview with The STAR, SINAG president Rosendo So noted that rice production cost is expected to significantly go down as the price of fertilizer has gone down to P1,200 per sack from the previous P2,500.

“The fertilizer cost dropped from P2,500 to P1,200 nationwide. This means the production cost of the farmers will be lessened and we expect a drop in the prices of rice by August,” So explained.

He said the price of local regular milled rice will go down to P30 per kilo in August.

Based on the monitoring of the DA yesterday, the retail price of regular milled rice ranged from P34 to P40 per kilo. So noted that a farmer spends P25,000 per hectare for fertilizer.

“With the decrease in the fertilizer, the production cost will drop to P12,000 plus the government subsidy of P6,600 per hectare so more or less, the production cost of a farmer will only reach P4,000 to 5,000,” So added.

At the same time, So said that the country’s rice production is enough until March 2024, contradicting a warning from Federation of Free Farmers (FFF) national manager Raul Montemayor of a looming rice crisis during the lean months of July to September.

“There will be no problem in the supply as the SPSICs (sanitary and phytosanitary import clearances) issued by BPI (Bureau of Plant Industry) have already reached 3.1 million metric tons (MMT). More than 700,000 MT already arrived and we expect more volume to arrive, but lesser than the 3.8 MMT last year,” So added.

2.1 million MT of rice needed

The country only needs 2.1 MMT of imported rice to ensure enough supply of the staple food, he pointed out.

“If the 3.1 MMT of imported rice will come in plus our local production, our rice supply will reach until March next year,” So added.

At the same time, So maintained that there is no need for the government to import rice to improve the buffer stocks of the National Food Authority (NFA).

“The NFA should buy from the local farmers as the RTL (Rice Tariffication Law) prohibits NFA. The NFA should go to the farmers to encourage them to sell their produce and second, increase the buying price of NFA,” So added.

According to So, the farmgate price of palay is expected to drop to P18 per kilo for dry and P15 per kilo for fresh.

“The retail price of rice can go down to P27 per kilo by next year,” he added.

He said rice sufficiency is achievable in 2025 to 2026 if the subsidy to farmers will continue.

“We can achieve it ahead of the target of 2027, by 2025 to 2026, depending on the direction of the economic team. We are 80 percent sufficient and we only need 20 percent. We were 90 percent sufficient before but it went down last year because of the direction of the former president (Rodrigo Duterte). It discouraged the farmers to plant,” So added.

He said the country needs to reach at least 24 MMT palay production, from the current 19 MMT palay production.

“If the area of production increases and the harvest will reach six tons per hectare or 5.5 tons average, we will meet the self-sufficiency target,” he said.

So also called on the DA to encourage farmers to plant early to minimize the impact of the El Niño phenomenon.

“The projection is that it will affect the third quarter of the year. Farmers should plant early before the expected drought as we also expect typhoons to still come in,” he said. –  Bella Cariaso