The Philippines should import more rice to replace losses in production of the staple due to Typhoon Lando, the Department of Finance’s (DOF) chief economist said on Thursday.
In an economic bulletin, Finance Undersecretary Gil S. Beltran said the rice importation is required to counter possible inflation, particularly on the prices of rice.
Beltran said that due to the destruction wrought by Lando, especially in the Philippine food basket of Central Luzon, the rice buffer could drop below 50 days’ supply, while the minimum rice buffer should be around 58 days’ supply.
“The country may have to import more rice to replace these losses in domestic production and avoid triggering an inflationary spiral,” Beltran said.
Inflation during the past four months had been at record-low levels, with inflation pegged at 0.4 percent in September, further down from 0.6 percent in August. The low inflation rate is due mainly to the low prices of oil.
But the destruction by Lando in the rice-producing provinces could drive prices of food upward.
Beltran gave recommendations on how the country can more easily recover from losses caused by natural disasters, such as providing farmers with crop-insurance protection, like the new micro-agricultural framework that will provide microinsurance protection to the crops of farmers.
“Government agencies also need to undertake emergency repair of destroyed infrastructure in the devastated areas. Aside from ensuring connectivity, infrastructure spending will generate non-farm economic activity that will mitigate the adverse impact of the disaster,” Beltran’s economic bulletin said.
The National Food Authority (NFA) has earlier purchased 750,000 metric tons (MT) of imported rice via a government-to-government scheme to beef up its buffer stock this year and in 2016. The volume included the 500,000 MT required by the NFA next year.
The National Economic and Development Authority earlier said the government is looking at increasing its 2016 rice imports by 1 million metric tons.