Moody’s Analytics sees Aug inflation at 4.8%
M
OODY’S Analytics expects the country’s inflation rate to average 4.8 percent in August, faster than the actual rate of increase in commodity prices in July. This is the low end of the Bangko Sentral ng Pilipinas (BSP) forecast of 4.8 to 5.6 percent in August. The higher inflation expectation of the BSP was due in part to the steady climb of rice prices. The BSP also noted that inflation may be higher in August due to weather disturbances, the sharp rise in fuel prices as well as
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increased transport costs. The central bank noted that higher train fares and toll rates, and the peso depreciation are the primary sources of upward price pressures in August. In July, the Philippine Statistics Authority (PSA) reported that inflation slowed to 4.7 percent, the lowest in 16 months. However, even during the briefing, the PSA already said rice prices have been climbing and could be the cause for high inflation. PSA data showed rice inf lation averaged 4.2 percent in Ju ly 2023, the highest since
Febr uar y 2019 when t he increase in the commodity’s prices was at 4.5 percent. The R ice Trade Liberalization (RTL) Act was implemented in March 2019. ( F u l l s t o r y h e r e : h t t p s : // businessmirror .com. p h / 2 0 2 3/0 8/0 4 /r i c e - p r i c e hike-may-dampen-momentum-to-tame-inf lation/). This may have prompted the President to issue Executive Order No. 39 which mandated a price ceiling of P41 per kilo for regular-milled rice and P45 per kilo of well-milled rice. (Full story here: https://business-
mirror.com.ph/2023/09/02/ pbbm-sets-nationwide-cap-onrice-price/). In a statement issued after the President set a price ceiling on the country’s staple, Socioeconomic Planning Secretary Arsenio M. Balisacan backed the issuance of EO 39 saying that a temporary ceiling price on rice will give Filipinos a much-needed reprieve in terms of high inflation as well as discourage hoarding. (Full story: https://businessmirror. com.ph/2023/09/04/neda-ricepr ice-cap-temporar y-necessary/). Cai U. Ordinario
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BSP ADOPTS VARIABLE RATE FORMAT FOR RRP w
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Tuesday, September 5, 2023 Vol. 18 No. 323
P25.00 nationwide | 2 sections 26 pages |
By Cai U. Ordinario
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PBBM vows aid for rice retailers; off to Asean meet
@caiordinario
HE Bangko Sentral ng Pilipinas (BSP) will shift to a variable-rate format with a predetermined offer volume in the auction for the overnight reverse repurchase (RRP) facility this week.
In a statement, BSP said this shift will take effect on Friday, September 8, and is part of its planned reforms which started with the adoption of the interest rate corridor (IRC) framework in 2016. The BSP believes the shift will help strengthen the price discovery process by providing market participants and monetary authorities alike a market-determined interest rate that conveys the prevailing cost of and demand for overnight funds in the financial system. “ They [reforms] are largely operational in nature and do not constitute any shift in the BSP’s monetary policy stance. These initiatives are geared towards enhancing the transmission of monetary policy by strengthening the link between monetary policy strategy and implementation,” BSP said in a statement. With this change, BSP said its monetary policy rate shall be called the “Target RRP Rate” and that it will introduce a formal operational target, to be called the “Overnight [ON] RRP Rate.” The BSP said it will signal its monetary policy through the Target RRP Rate. The rate will be set after the meeting of the Monetary Board on the BSP’s monetary policy stance. As for the ON RRP rate, BSP said this is an operational target that is market-determined and considered a short-term interest rate. This is used by central banks as a guide on a day-to-day basis in terms of using their monetary instruments to reflect the prevailing monetary policy stance. See “BSP,” A2
By Samuel P. Medenilla @sam_medenilla
P
PRESIDENT Ferdinand R. Marcos Jr. leaves for Jakarta, Indonesia, on Monday (September 4, 2023) to participate in the 43rd Association of Southeast Asian Nations (ASEAN) Summit and Related Summits from September 5 to 7, 2023. At the summit, he will push for Philippine priorities in Asean and work with other Asean Members. The priorities include a rules-based international order, including in the South China Sea, food security, climate justice, tapping the potential of the digital and creative economies, migrant worker protection, as well as combating Trafficking-in-Persons. ALFRED FRIAS/NIB-PNA
HOUSE, DBM TWEAK ’23 BUDGET FOR P2-B RICE RETAILERS’ AID By Jovee Marie N. dela Cruz @joveemarie
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HE House of Representatives is working closely with the Department of Budget and Management (DBM) to allocate P2 billion in cash assistance for retailers affected by the rice price ceiling imposed by the Palace, Speaker Ferdinand Martin G. Romualdez announced on Monday. Romualdez instructed Ako Bicol Party-list Rep. Elizaldy Co, the chairman of the House Committee on Appropriations, to immediately coordinate with DBM for the swift allocation of the P2 billion. “Our goal is to ensure that we can extend assistance to rice retailers
who may be affected by this rice price ceiling, as it is a directive from our President aimed at protecting consumers,” Romualdez explained. Co said his committee has coordinated with DBM Secretary Amenah Pangandaman to explore avenues for the allocation under the 2023 General Appropriations Act. “We will promptly engage with the DBM to expedite the release of the P2 billion funds for our rice retailers,” Co said. Romualdez vowed Congress’s commitment to fortifying and bolstering the resilience of essential food supply chains. He earlier disclosed plans to also engage with leaders of rice retailers
later this week to hear their concerns on potential financial losses from the rice price ceiling. “The government is not insensitive, so we want to listen to their concerns, and we will try to find a solution to address their fears of incurring losses,” the Speaker said. “We are aware that they have high costs from traders, but our priority is the public’s difficulty in buying rice,” he added. President Ferdinand R. Marcos Jr. on Friday issued Executive Order No. 39, setting prices at P41.00 per kilo for regular milled rice and P45.00 for well-milled rice starting September 5. This action was prompted by government intelligence indicating that certain un-
scrupulous traders planned to hike rice prices to as high as P70.00 per kilo. Romualdez compared this situation to what occurred with onion prices when onion cartels raised them to P800 per kilo. “Naturally, the President had to act swiftly to counter this illintentioned plan by a select few,” said Romualdez. Retailers, however, expressed their dissatisfaction, noting that they procure rice from traders for nearly P50 per kilo. “But rest assured, the government is committed to supporting our retailers affected by this executive order,” said the Speaker. See “House,” A2
RESIDENT Ferdinand R. Marcos Jr. said the government will tap the P6.4-billion sustainable livelihood program (SLP) fund of the Department of Social Welfare and Development (DSWD) to provide aid to smallscale rice retailers affected by the price ceiling under his Executive Order (EO) No. 39. In his speech before f lying to Indonesia to attend the 43rd Association of Southeast Asian Nation (Asean) Summit and related summits, the chief executive disclosed the Department of Trade and Industry (DTI) and the Department of Agriculture (DA) are now coming out with the list of qualified beneficiaries for the initiative through the help of rice retailer associations. “The rice retailers should have nothing to worry about. We understand that you will face an ordeal [because of EO 39], since you will suffer losses. The government is there to provide you assistance so you can recoup your losses from the price cap,” Marcos said in Filipino. “The DSWD already assured us it has the fund so that once we compute the profit losses of rice retailers, we will provide them with the corresponding aid,” he added. DSWD Secretary Rexlon “Rex” T. Gatchalian confirmed they have sufficient SLP funds to finance the cash grants for the affected retailers. “We know the capital of the small rice retailers will be affected [by EO 39]. That is where DSWD will come in as ordered by the President to ensure their needed capital will not be exhausted because of the Executive Order,” Gatchalian said.
Other assistance
HE said DSWD already has the necessary mechanism in place to immediately facilitate the payout as soon as they get the list of beneficiaries from DTI and DA. See “PBBM,” A2
PESO EXCHANGE RATES n US 56.6510 n JAPAN 0.3874 n UK 71.3633 n HK 7.2210 n CHINA 7.7951 n SINGAPORE 41.8583 n AUSTRALIA 36.5342 n EU 61.0471 n KOREA 0.0430 n SAUDI ARABIA 15.1037 Source: BSP (September 4, 2023)