The Philippine Statistics Authority (PSA) said that the uptrend of growth in prices of rice may carry on until July this year which could further hurt the country’s poorest households.
PSA Undersecretary Claire Dennis S. Mapa said that the faster rice inflation was due to the low base effect seen from January to July 2023.
To recall, rice inflation went up to 5.6 percent in August 2023 after six months of deceleration, then skyrocketed to 17.9 percent in September.
For the poorest households, rice inflation stood at 24.8 percent from 21.4 percent in the previous month.
Rice for these households is important as it comprised 17.8 percent of their inflation basket, meaning that further increases in rice prices create a "huge impact" on their inflation rate.
To counter the continuous growth in rice prices, Socioeconomic Planning Secretary Arsenio M. Balisacan said that the government will continue to monitor the prices and expedite rice imports in the country amid El Niño risk.
Poor Filipino families at risk from impending rice price surge
At a glance
Consumers are urged to prepare for a surge in rice prices as the government warned that recent cost increases for the nation's staple food are expected to persist, posing a threat to the country's most vulnerable households.
In a briefing, Philippine Statistics Authority (PSA) Undersecretary Claire Dennis S. Mapa said that the faster rice inflation, posted at 22.6 percent from 19.6 percent in December 2023, was due to the low base effect seen in January to July 2023.
Inflation's low base effect occurs when it seems like cheaper items are increasing by a higher percentage than more expensive items, even if the actual price increase is the same.
Mapa said that the rapid rise in rice inflation could extend until July of this year.
“Nagkaroon lang tayo ng pagtaas (of rice inflation) noong August last year. Tapos, talagang pumalo siya noong September, and then tuloy-tuloy na [We observed a rise in rice inflation only in August last year. Subsequently, it persisted in September and beyond],” Mapa explained.
“So, mababa, parang may mababang base ang pinagalingan ng presyo ng bigas [So, the price of rice is low, it seems to have a low base],” he added
In January 2024, the PSA reported significant yearly increases in the average prices of three main rice classes—regular milled, well-milled, and special.
The average price of regular milled rice rose by 25.4 percent to P49.65 per kilo from P39.6, while well-milled rice saw a similar 25 percent increase to P54.91 per kilo from P43.92.
Additionally, the average price of special rice climbed to P63.9 per kilo, marking an 18.9 percent increase from P53.76 per kilo in the same period last year.
To recall, the inflation on rice went up to 5.6 percent in August 2023 after six months of deceleration, then skyrocketed to 17.9 percent in September even as the government imposed caps on regular milled and well-milled rice.
As for the bottom 30 percent income households, rice inflation for them rose to 24.8 percent in January 2023 from 21.4 percent in the previous month.
Mapa said that rice for these households comprised 17.8 percent of their inflation basket, creating a "huge impact" on their inflation rate.
“Substantial, close to 20 percent, parang close to one-fifth of their consumption. So, doon natin nakikita na talagang malaki yung impact sa kanila. [Substantial, close to 20 percent, it's like close to one-fifth of their consumption. So, there we see that the impact on them is really significant],” he said.
Of the 3.6 percent inflation rate for these households, rice shared almost 3.0 percentage points.
Counter-measures
National Economic and Development Authority Secretary Arsenio M. Balisacan said that the Inter-Agency Committee on Inflation and Market Outlook will continue to monitor the prices of rice and other goods to advise the government of the policy recommendations to ensure stable prices of commodities.
In addition, Balisacan said that the country recently signed a Memorandum of Understanding with Vietnam for the continuous supply of at least 1.5 to 2 million metric tons of rice every year.
He also noted that the Department of Social Welfare and Development aims to expand its National Food Stamp program to cover 300,000 households this year to assist vulnerable families during the El Niño season.
“We introduce stop-gap measures, as necessary, such as allowing further imports on key commodities until our supply stabilizes at prices affordable to consumers while ensuring remunerative prices for local producers,” the NEDA chief added.
Meanwhile, Budget Secretary Amenah F. Pangandama said the 2.8 percent headline inflation in January indicated that businesses have a greater opportunity to thrive, allowing the government to concentrate on areas of growth and development.
“Overall, with lower inflation and lower unemployment rates, we are off to a very good start this 2024, towards high and sustained growth,” Pangandaman said in a statement.
“This shows that our economic policies are taking effect in spite of global headwinds and climate change, and assures us that we are on track with our Agenda for Prosperity and in meeting our goals for Bagong Pilipinas,” she added.