DOF: Gov't bolsters efforts to tackle inflation effects
At A Glance
- Finance Secretary Benjamin Diokno said the government is committed to addressing the surge in consumer prices. Inflation rate reached 6.1 percent in September.<br>Diokno said efforts are being intensified to mitigate the effects of inflation.<br>Food and non-alcoholic beverages, restaurants and accommodation services, and housing contributed to September's inflation rate.<br>Food inflation in September rose to 10 percent from August's 8.2 percent and the previous year's 7.7 percent.<br>Rice and vegetables were the main drivers of the upward trend in overall inflation.<br>Recent typhoons during the Habagat season affected rice and vegetable prices.<br>Executive Order No. 39 imposed a price ceiling on rice but will be lifted as the palay harvest season progresses and timely imports ensure sufficient rice supply.<br>Downward pressure on rice prices is expected due to adequate supply, low farmgate prices, and easing international rice prices.<br>Core inflation, excluding volatile food and energy items, declined to 5.9 percent in September.
The Department of Finance (DOF) said the Marcos administration is fully committed to implementing the necessary policy measures and programs to tackle the surge in consumer prices.
In a statement, Finance Secretary Benjamin E. Diokno said that with the consumer price rate reaching a significant 6.1 percent in September, the government is amplifying its efforts to mitigate the effects of inflation.
Diokno underscored the government's determination to implement measures in order to alleviate the burden of rising prices on both the economy and the public.
“The Philippine government is all hands on deck in ensuring that we have the right policy measures, programs, and monitoring mechanisms in place to arrest rising commodity prices, which remain to be the top-of-mind concern of our citizens,” Diokno said.
The latest inflation rate brought the year-to-date average to 6.6 percent, above the government’s assumption of 5.0 percent to 6.0 percent for full year 2023.
The main contributors to the September headline inflation were Food and non-alcoholic beverages, contributing 3.7 percentage points (ppt) of the overall 6.1 percent; Restaurants and accommodation services (0.7 ppt); and Housing, water, electricity, gas and other fuels (0.5 ppt).
Food inflation in September also rose to 10 percent from 8.2 percent in August and 7.7 percent in the same month last year.
The main drivers to the upward trend in overall inflation were rice (1.6 ppt) and vegetables (0.8 ppt) as both food commodities posted double-digit growth in prices at 17.8 percent and 29.6 percent, respectively, mainly due to the adverse effects of the recent typhoons during the Habagat season.
“To help ensure that rice and vegetable inflation will decline for the rest of the year, the government will continue to implement a package of measures that seeks to address non-competitive market behavior, support farmers, and protect the vulnerable,” Diokno said.
Executive Order (EO) No. 39, which imposed a price ceiling on rice, was implemented beginning September 5, 2023 as a short-term measure against non-competitive practices by market players.
President Marcos announced last Oct. 4, that EO No. 39 will be lifted, as the palay harvest season progresses and the timely arrival of imports ensure sufficient rice supply by year-end and moderate rice inflation.
The downward pressure on rice prices, or factors that may lead to the reduction of said prices, are the adequate rice supply by year-end, low farmgate prices, and easing international rice prices. However, we need to monitor closely the outlook for international spot and futures rice prices.
Core inflation, which excludes selected volatile food and energy items, declined to 5.9 percent in September, from the 6.1 percent print in August, albeit still higher than 5.0 percent in September 2022.
The inflation rate in the National Capital Region (NCR) also accelerated to 6.1 percent from 5.9 percent in the previous month, albeit slower than the 6.5 percent inflation rate recorded in the region in September last year.
Fifteen regions in areas outside of NCR also recorded increased inflation rates. In particular, Region III (Central Luzon) recorded the highest inflation rate at 7.9 percent, while Region VII (Central Visayas) had the lowest inflation rate at 3.8 percent.
Diokno said the government is intensifying efforts in warehouse investigations, charging market players for anti-competitive practices, and closely monitoring imported rice prices.
The goal is to protect farmers, prevent inflated profits for importers and traders, and enhance the productivity of rice farmers through Rice Competitiveness Enhancement Fund programs such as farm mechanization, seed development, credit assistance, and extension services.
Meanwhile, the government is also undertaking measures to mitigate non-food inflation across several fronts.
These include energy and water demand management measures; supply management measures; managing cost of electricity; careful review of wage and fare hike petitions; and monitoring the implementation of EO 41 prohibiting the imposition of pass-through fees for delivery trucks.
To help protect the vulnerable sectors, the government also continues to focus on the completion of its targeted cash transfer program as well as fuel subsidy programs for qualified drivers and operators of public utility vehicles (PUVs).
Meanwhile, the government will also accelerate the implementation of its 2023 Fuel Assistance for Farmers Program to farmers and fisherfolk.
The Inter-agency Committee on Inflation and Market Outlook (IAC-IMO) remains committed to the continued monitoring of developments in food and non-food inflation to be able to formulate timely and relevant policy recommendations to help mitigate inflationary pressures.