Despite price caps, rice inflation fastest in 14 years

MANILA, Philippines — Inflation for rice posted its fastest increase in 14 years, even as the government imposed caps on regular milled and well-milled rice last month, according to Philippine Statistics Authority (PSA) data.

National Statistician Dennis Mapa said in a press conference yesterday that rice registered a double-digit inflation rate of 17.9 percent in September, from only 8.7 percent in August.

“This is the highest since March 2009 when our rice inflation reached 22.9 percent,” Mapa said.

Rice was cited as the main driver for the higher food inflation rate of 10 percent in September from the previous month’s 8.2 percent. Mapa noted that rice has an 8.87-percent weight in the headline or overall inflation rate.

The higher inflation rate was noted in September, despite a price ceiling of P41 per kilo for regular milled rice and P45 per kilo for well-milled rice. The price caps, which took effect Sept. 5 and lifted on Oct. 4, were intended to address rising rice prices.

Asked whether the rice price caps were effective in stabilizing prices, Mapa said this would need further study as he noted that the caps had mixed results in terms of compliance.

He pointed out that of the 2,601 regular milled rice varieties monitored by the PSA, only 640 were compliant with the price cap of P41 per kilo. As for well-milled rice, only 687 of 3,498 varieties tracked by the PSA were within the price cap.

National Economic and Development Authority Secretary Arsenio Balisacan said in a statement that the government, through the Inter-Agency Committee on Inflation and Market Outlook, is proactively monitoring the supply and demand of key commodities in order to provide policy recommendations to the President and Cabinet.

“In line with this, we are closely monitoring both local and global markets in terms of price movement, as they may be affected by the availability of supply or disruptions in the supply chain,” Balisacan said.

The farmers’ group Samahang Industriya ng Agrikultura (SINAG) yesterday projected that the country’s palay harvest from September to December 2023 could reach 10.5 million metric tons, which would translate to 6.5 million MT of rice, and that the country’s buffer stock by the end of the year will be enough for 60 days.

In an interview with The STAR, SINAG chairman Rosendo So said the peak of palay harvest would start this Oct. 15 and end on Nov. 15.

“We will have enough supply even without (rice) imports, as by the end of December our stocks will reach 60 days,” So said.

He added that the Department of Agriculture should start distributing the P5,000 subsidy to farmers after President Marcos ordered the release of the P12.7-billion funding under the Rice Farmers Finance Assistance Program.

“The DA should closely monitor the planting season as farmers who have already harvested are starting to plant again. The subsidy should be given early, including the seeds and, after two weeks, the fertilizer subsidy should be distributed,” So added.

So stressed that the DA should take advantage of the rains and encourage farmers to plant to ensure enough rice supply until June 2024, even without the imported grains.

Meanwhile, Malacañang expressed optimism yesterday that Executive Order 41, which suspended the “pass-through” fee collection of local governments on national roads, would lower the costs of agricultural goods ­– one of the drivers of last month’s inflation.

Under the order issued last Sept. 25, local governments are prohibited from collecting toll fees and charges on all vehicles transporting goods or merchandise while passing through national roads and other thoroughfares not constructed or funded by them. — Bella Cariaso, Marc Jayson Cayabyab