MANILA -- An ING Bank report sees a possible deceleration in the Philippines’ inflation rate as a result of the liberalization of rice importation, which will immediately address supply issues in the domestic market.
Citing reports, ING’s publication THINK, issued last Oct. 9, and jointly written by ING Bank Senior Economist for the Philippines Nicholas Mapa and economist for Asia Prakash Sakpal, said President Rodrigo Duterte`s decision to greenlight liberalized importation of the country’s staple food will temper food inflation.
“Rice accounts for 9 percent of the CPI (consumer price index) basket and controlling inflation of this important food item could help lower overall inflation and anchor inflation expectations in the coming months,” it said.
Domestic inflation has been on the rise and has breached the government’s 2 percent to 4 percent target band since last March when consumer prices registered a year-on-year uptick of 4.3 percent.
Authorities have traced faster inflation of the heavily-weighted food and non-alcoholic beverages index due to supply constraints on rice, fish, meat and vegetables due to weather-induced and management issues.
Other contributory factors are the jump in the prices of petroleum products in the international market and efficiency issues in the implementation of "sin taxes".
To address the lack of supply of these basic commodities, with rice in particular, Malacañang has issued several directives targeted to boost supply and help reduce consumer prices.
These directives include Administrative Order (AO) No. 13, which removes non-tariff barriers and streamlines administrative procedures on the import of basic agricultural commodities.
The Office of the President also issued Memorandum Order (MO) No. 26, which directs the Department of Trade and Industry and the Department of Agriculture (DA) to implement measures that would reduce the gap between farm-gate and retail prices of agricultural products.
It has also issued MO No. 27, which directs the DA, the Department of the Interior and Local Government, and the Metropolitan Manila Development Authority (MMDA) to ensure efficient and seamless delivery of imported agricultural and fishery products from ports to markets.
MO 28, meanwhile, directs the National Food Authority regarding the immediate release of about 230,000 metric tons (MT) of rice in its warehouses nationwide and the immediate distribution of the 100,000 MT of rice that have been contracted and are expected to be delivered by the end of last month. (PNA)