Agriculture Secretary Francisco Tiu Laurel is casting doubt on the Bangko Sentral ng Pilipinas’ (BSP) projection that inflation likely quickened in September due to higher rice prices, maintaining that retail prices of the staple remain stable.

The BSP estimated that last month’s inflation rate may settle within the range of 1.5 percent to 2.3 percent, quicker than the 1.5 percent in August.

“Upward price pressures for the month are likely to arise from higher prices of rice and fish. Elevated domestic fuel costs likewise contribute to upside price pressures for the month,” the BSP said.

“These pressures could be partially offset by the decline in vegetables and meat prices along with lower electricity rates,” it added.

Tiu Laurel questioned the inclusion of rice as a potential driver of inflation, noting that the Department of Agriculture's (DA) monitoring shows no such high price increases.

“There's no shortage, and there's actually a lot of rice around. Prices should not go up,” he said in a press briefing.

With the ongoing harvest season, Tiu Laurel said only around 30 percent of palay (unmilled rice) has been harvested, with the remainder expected to be gathered in October and November, which would further boost the country’s rice supply.

Based on DA monitoring in the first week of September, prevailing market prices stood at ₱46 per kilo for imported premium rice, ₱45 for imported well-milled rice, and ₱39 for imported regular milled rice.

In the final week, both the imported well-milled rice and milled rice saw their average prices fall to ₱43 and ₱38, respectively. The price of imported premium rice remained the same.

Meanwhile, average prices settled at ₱50 per kilo for local premium rice, ₱43 for local well-milled rice, and ₱38 for local regular milled rice in the previous month.

John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies (PIDS), attributed the expected higher inflation in September to the suspension of foreign rice purchases, which is driving up rice prices.

“With supply expected to tighten and local output not sufficient to meet demand, price pressures may accelerate, especially in the near term,” said Rivera.

The DA, however, has been reiterating that the harvest season is on an upswing this year due to favorable weather conditions during the planting season.

“The harvest is high, so our supply is in good shape, which means imports will likely not be necessary,” Tiu Laurel earlier told reporters at the House of Representatives.

President Ferdinand “Bongbong” Marcos Jr. has agreed to extend the 60-day import ban by another 30 days to further stabilize farmgate prices of palay. A potential extension to the end of the year is on the table.

Vegetable prices

Instead of rice, Tiu Laurel said the likely culprit for a potential uptick in inflation is vegetables, whose prices surged in the previous month.

“It's the vegetables that are actually increasing, from ginger to bell pepper to onions to others, even chili reached ₱800 per kilo, because that is maybe due to the rains and the floods,” the official said.

“We are now addressing that, and hopefully inflation will stabilize or maintain,” he added.

The DA chief said he has allowed the importation of white onions, red onions, and carrots to help stabilize retail prices and augment the supply disruption.

The country has been importing white onions since last month, and prices have since dropped to ₱100 to ₱120 per kilo from as high as ₱160 per kilo before shipments arrived.

For red onions, Tiu Laurel said he authorized the importation of around 3,000 to 5,000 metric tons (MT) to help bring down prices, which have soared to ₱140 to ₱160 per kilo.

“I have a feeling that the remaining local stocks are being withheld to maximize [prices]. So, that’s why I ordered, silently, to start importing last week,” he added.

He said the importation of both red and white onions will continue until the start of the harvest season of the produce around February.

Tiu Laurel also gave the thumbs up for carrot imports beginning this month, which will be limited to a “few hundred tons” to assess the market first, as prices have recently increased.