National Economic and Development Authority Secretary Arsenio M. Balisacan said that the reduction of domestic rice prices by 20 percent in September is possible given that world prices will decline.
Balisacan referred to the statement by Finance Secretary Ralph G. Recto, noting that external factors have been waning so far.
“The point is that the global rice prices by the second half of the year, particularly by September is going down. It’s already past El Nino, the election in India is over so all the restrictions and exports of major exporting countries are expected to loosen and then the production is expected to increase and the global supply,” he told reporters on the sidelines of the Philippine Economic Briefing.
“As is said the domestic prices simply reflect the trends on global prices particularly for rice so as global prices come down provided our exchange rate will not sharply depreciate, which I don't expect then, we should see domestic prices coming down,” he added.
Rice inflation posted a decline after a six-month uptrend to 23.9 percent from 24.4 percent, contributing 46.2 percent to the overall inflation.
As of March this year, the prices of rice from Vietnam and Thailand eased month-on-month but are still 27 percent to 37 percent higher than prices a year ago.
May inflation forecast
Balisacan said he expects the inflation rate to stay within the target bracket of two percent to four percent in May.
“Well, it's two to four, and it can be lower or it can be higher than 3.8, but we expect to be in that range,” he noted.
The Bangko Sentral ng Pilipinas (BSP) lowered its risk-adjusted inflation forecast for 2024 to 3.8 percent from 4.0 percent, saying that the April readout “was better than expected” as it included positive base effects.
The NEDA chief also stated that the growth target of six percent to seven percent will still remain despite the possible rate cut in August as hinted by the BSP.
With regards to the peso, which depreciated further last week and closed at P58.27 to the dollar, Balisacan said that it will not have much effect if it is only temporary.
“But if it stays there a longer time, of course it will affect expectations. And then of course prices, output, and so on,” he said.