Rice, drinks propel prices of goods to four-month high, over gov’t target
Inflation hit a four-month high of 6.1 percent in September, up from 5.3 percent a month ago due to faster increases in the prices of food, especially rice, and non-alcoholic beverages, the Philippine Statistic Authority (PSA) said Thursday.
National Statistician and Civil Registrar General Dennis Mapa said this was still slower than the 6.9 percent inflation in September 2022, and brought average inflation for the first nine months to 6.6 percent, well over the target range of 2 percent to 4 percent.
This comes a day after President Ferdinand Marcos Jr. said the 15 percentage-point drop in his approval rating in the recent Pulse Asia survey was “not surprising” given the gut issues, including high prices of basic commodities, that his administration is trying to address.
Pulse Asia said the drop in the approval scores of the country’s top leaders might be traced to the continued rise in the prices of basic commodities, such as food and fuel.
The same survey showed elevated inflation remained the top concern of Filipinos, followed by the need to raise the wages of workers for them to cope with the rising prices of goods and services.
Mapa said the rise in the overall inflation in September 2023 was primarily brought about by the higher year-on-year increase in the heavily weighted food and non-alcoholic beverages category, which rose to 9.7 percent during the month from 8.1 percent in the previous month.
Food inflation alone rose to 10.0 percent in September from 8.2 percent in August.
This was due mainly to the higher inflation rate for rice (17.9 percent from 8.7 percent), meat (1.3 percent from -0.1 percent), fruits (11.6 percent from 9.6 percent), and corn (1.6 percent from 0.9 percent).
The prices of fish, vegetables, sugar, eggs and dairy products, and bread and other cereals recorded slower rates of inflation.
Rice accounts for 9 percent of the consumer basket.
Transport, with an inflation rate of 1.2 percent during the month from 0.2 percent in the previous month, also contributed to the rise in headline inflation.
Higher annual increases were also noted in the indices of health with 4.1 percent inflation from 3.9 percent; recreation, sport, and culture, 5.1 percent from 4.9 percent; and education services, 3.6 percent from 2.9 percent.
Core inflation, which excludes selected food and energy items,decelerated further to 5.9 percent in September 2023 from 6.1 percent in the previous month, bringing the average core inflation from January to September 2023 to 7.2 percent. In September 2022, core inflation stood at 5.0 percent.
Mapa said the impact of the recent price cap on rice showed mixed results, with resellers using up their stock in the first 15 days at higher prices, before complying with the price ceilings after that.
“With the mixed results of compliance, we can’t say if the price cap was effective,” Mapa said.
But Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said the price cap on rice that was implemented from Sept. 5 to Oct. 4, 2023 might have helped in controlling the inflation of rice.
“The inflation of rice] could have been faster had it not been for the temporary price ceiling,” Ricafort said, adding that the headline inflation is still expected to ease year on year for the coming months.
National Economic and Development Authority Secretary Arsenio Balisacan said the government will continue supporting the most vulnerable sectors while implementing necessary measures to respond to rising prices.
“The government is committed to providing targeted assistance to affected vulnerable segments of the population while food prices remain elevated,” Balisacan said after the release of the September inflation data.
Balisacan cited the Food Stamp Program launched on Sept. 29, whichprovides beneficiaries with P3,000 in monthly meal assistance, as a way the government seeks to address the lingering incidence of food poverty and malnutrition among low-income households.
Moreover, as of Sept. 27, 2023, the Land Transportation Franchisingand Regulatory Board has provided fuel subsidies to drivers of 74,089 public utility vehicles.
The Department of Social Welfare and Development (DSWD) will also provide a P10,000 cash subsidy to 78,000 farmers listed in the Pantawid Pamilyang Pilipino Program (4Ps). Additionally, rice farmers are set to receive P5,000 as financial assistance to help sustain their productivity amid the increasing cost of production.
On Sept. 18, the National Food Authority Council set a new buyingprice for palay (unhusked rice), raising the buying price of dry palay from P19 to P23 and wet palay from P16 to P19, in a bid to provide farmers with higher income.
Inflation peaked at 8.7 percent in January 2023 but eased in thesucceeding six months and picked up again in August 2023 at 5.3 percent.
The Presidential Communications Office (PCO) also said the government is committed to bringing down costs and making long-term investments in irrigation and modern farming practices to support the agricultural sector.
The PCO said the onset of the harvest season would boost the country’s supply of rice.