NG focusing on food, nonfood inflation–DOF By Reine Juvierre S. Alberto @reine_alberto
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INANCE Secretary Ralph G. Recto said on Wednesday that the national government is addressing food and non-food inflation through mitigation measures to safeguard the public’s purchasing power. This, after the inflation rate increased by 3.9 percent in May 2024, faster than the 3.8 percent in April but slower than 6.1 percent in May a year ago. The slight uptick in inflation was driven by the increased price of housing, water, electricity, gas and other fuels and transport. “We are vigilantly tracking persistent inflation drivers and employing a whole-of-government approach in crafting data-driven policy measures
to effectively counter their effects in a sustainable manner. Our top priority is to ensure that the majority of Filipinos, especially the poor and vulnerable sector, benefit from these interventions,” Recto said. With the slow growth in rice inflation in May at 23.9 percent, the Department of Finance (DOF) said high rice prices remain a key concern. To combat this, the National Economic and Development Authority (Neda) Board approved on Monday, June 3, the tariff reduction of imported rice from 35 percent to 15 percent for both quota and out-quota rates until 2028 to temper rice infl ation. “In May, inflation for the bottom 30 percent of households was higher at 5.3 percent, and rice inflation made up more than 80 percent of this. The
current Neda Board agreement aims to alleviate the plight of all Filipino consumers, especially the most vulnerable,” Recto said. The Philippine Statistics Authority (PSA) estimates a P6.00 to P7.00 reduction in rice prices per kilo after the slashing of tariff rates. The reduced tariff rates by at least 15 percent on corn, pork and mechanically deboned meat under Executive Order No. 50, s. 2023, until 2028 was also maintained by the Neda Board. Furthermore, trucks transporting agricultural goods are exempted from toll rate hikes starting June 1, 2024, to prevent the second-round effects of toll rate increases on food infl ation. The Department of Agriculture (DA), meanwhile, is also conducting ongoing consultations with operating
units and regional offices on the rollout of the plan, the DOF said. To further protect consumers from elevated electricity prices due to Meralco’s proposed cost recovery, the DOF said the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) has proposed to the Energy Regulatory Commission (ERC) a staggered implementation of the cost recovery scheme over at least 12 months to mitigate its inflationary impact. “Rest assured, the government is continuously formulating sustainable solutions that will manage the price increases of other commodities and keep inflation within our target range. The solutions on the food security front are guaranteed to work in tandem with our long-term goal of modernizing our agriculture sector,” Recto said.
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MORE TRAVELS NOTED AS INFLATION HITS 3.9%
SPOUSAL SWEAR-IN
New officers of the Senate Spouses Foundation Inc. (SSFI) led by actress and global fashion icon Heart Evangelista, took their oath before Senate President Francis “Chiz” Escudero on Wednesday, June 5, 2024. From left: Taguig City Mayor Lani Cayetano, Chairperson on the Committee on Arts and Culture; Marielle Padilla, Public Relations Officer; Rep. Lani Mercado-Revilla, Treasurer; Maricel Tulfo, Secretary and Chairperson of the Committee on Public Assistance; Love Marie Ongpauco-Escudero, President; Kathryna Yu-Pimentel, Vice President and Chairperson of the Committee on Social Events; Teodoro Misael Llamanzares, Assistant Secretary and Chairperson of the Committee on Finance and Logistics (represented by Brian Poe-Llamanzares); DSWD Undersecretary Emmelin Villar, Legal Counsel and Chairperson of the Committee on Environment; Nancy Dela Rosa, Public Relations Officer (represented by her daughter Kristel Dela Rosa Estoesta); and Issa Baraquel, Chairperson of the Committee on Youth and Women. ROY DOMINGO By Cai U. Ordinario
@caiordinario
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OAD TRIPS that took families and friends from one part of the country to another for vacation or to attend various gatherings fueled the country’s inflation rate in May 2024, according to the Philippine Statistics Authority (PSA). electricity-gas-and-other-fuels-psa/)
Data showed inflation picked up to 3.9 percent on the back of higher electricity and liquefied petroleum gas (LPG) as well as transportation costs, namely, gasoline, passenger transport by sea, and diesel. PSA said housing, water, electricity, gas and other fuels accounted for 56.8 percent while transportation accounted for 43.2 percent share of the increase in inflation. (See: https://businessmir-
“[There’s] travel, that is one. Of course [there’s] input [also], which is the price of the gasoline, diesel. [But the] demand, we are seeing really a lot of travel. Ganun naman kadalasan, seasonal naman talaga ang price ng boat [That happens frequently, prices are seasonal],” National Statistician Claire Dennis S. Mapa told BusinessMirror on Wednesday.
ror.com.ph/2024/06/05/inflation-up3-9-in-may-driven-by-housing-water-
See “Inflation,” A
‘RICE TARIFF CUT COULD BOOST GROWTH WITH MORE SPENDING’
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HE reduction of rice tariffs could have a net positive effect on the country’s economic growth by boosting household consumption, according to an economist from HSBC. In a briefing on Wednesday, HSBC Asean economist Aris Dacanay told reporters that the maximum impact of the rice tariffs, assuming a zero savings rate, is a 1.4 percentage point (ppt) addition to GDP growth. Given that consumption accounts for 70 percent of GDP and households spend about 10 percent of their budgets on rice, reducing prices by 20 percent means a 2-percent savings on household budgets, which could lead to a 1.4 ppt increase in GDP growth, Dacanay explained. “If all the unleashed household savings or freed up household savings goes to buy goods that are domestically produced and all of them are spent, nothing is saved, then the potential, the highest, the maximum [additional] growth it could deliver is 1.4 ppts,” Dacanay stressed.
Dacanay considers the reduction of rice tariffs to 15 percent from the 35 percent rate “a large downside risk” that has the potential to boost growth and hasten the slowdown in inflation. However, he said, given that the news of the shift in policy came only on Tuesday, HSBC has not yet included it in its inflation and growth estimates for this year. Currently, Dacanay still sees inflation increasing above 4 percent. The impact of the lower rice tariffs on inflation will only happen once the tariffs are already in effect. Once in effect, lower rice tariffs will not only have an impact on the country’s inflation rate but also the Monetary Board’s decision to cut key policy rates. Dacanay said if inflation reaches the lowerbound of the 2 to 4 percent target range, this See “Tariff,” A
PESO EXCHANGE RATES US 58.6810 Q JAPAN 0.3791 Q UK 74.9532 Q HK 7.5103 Q SINGAPORE 43.5966 Q AUSTRALIA 39.0170 Q SAUDI ARABIA 15.6462 Q EU 63.8508 Q KOREA 0.0427 Q CHINA 8.1049 Source: BSP (June 5, 2024)