The Department of Finance (DOF) expects the elevated rate of increase in food prices would peak this month due to rising volume of meat imports that boosted domestic supply.
In a statement on Wednesday, July 14, Finance Undersecretary and Chief Economist Gil S. Beltran said that food price inflation has stabilized as it maintained its pace at 4.88 percent in June and May.
“Food price inflation is expected to peak this month as imports rise to boost domestic supply,” Beltran said in a report submitted to Finance Secretary Carlos G. Dominguez III.
Last month, average prices of rice, fruits, and vegetables declined by 1.1 percent, 0.64 percent, and 2.71 percent, respectively, muting the higher-than-average inflation in the prices of meat (19.24 percent) and fish (8.66 percent).
Data from the Bureau of Animal Industry showed that the country’s total meat importations reached 581,827.61 metric tons in the first six-months of 2021, up 44 percent compared with a year earlier.
Pork imports, which cornered nearly half of the total meat shipments, jumped 176 percent at end-June to 277,850.59 metric tons.
Based on the Department of Agriculture’s daily price monitoring report, the average retail prices of pork kasim and pork liempo at select markets in Metro Manila were at P330 to P360 per kilo and P370 to P380 per kilo, respectively.
However, Beltran said that bolstering food productivity is still necessary for long-term food price stability.
While meat prices started to decline, Beltran noted that crude oil prices are now trending up as global recovery boosts demand.
“A quick pass-through of international crude oil prices on domestic prices is desirable since the country is an oil importer. The use of more energy efficient technologies has allowed the country to trim down the impact of oil price adjustments on domestic inflation,” Beltran said.
In June, the country’s headline inflation eased to 4.1 percent after clocking 4.5 percent for three consecutive months.
Non-food price inflation during the month decelerated from 4.01 percent in May to 3.37 percent in June, largely due to the transport group.
The transport price index registered year-on-year increase of 9.83 percent, down from 16.68 percent in the previous month.
In the first six-months of 2021, average inflation settled at 4.42 percent, still above the government’s target of 2.0 percent to 4.0 percent.