ALMOST a year after the full implementation of the rice trade liberalization (RTL) law, rice prices continued to fall, albeit at a slower pace in January 2020, according to data released by the Philippine Statistics Authority (PSA).
In January, PSA data showed inflation accelerated to 2.9 percent in January 2020, from 2.5 percent in the preceding month. However, this is still slower than the 4.4 percent posted in January 2019.
National Statistician Claire Dennis S. Mapa said rice prices contracted 6.5 percent in January 2020, the ninth consecutive month rice experienced deflation.
“This is one of the reasons why food inflation was relatively low,” Mapa told reporters in a briefing in Quezon City on Wednesday.
However, Laban Konsyumer Inc. (LKI) President Vic Dimagiba said despite the decline, a kilo of regular milled rice remained at P37, while a kilo of well-milled rice was at P40.
Dimagiba said this was still higher than the government’s promise of P32 per kilo. Nonetheless, he said, there was already a P5-per-kilo reduction compared to 2019.
He said the disparity between retail and farm-gate prices remain wide due to “inadequate monitoring and enforcement.”
Given the trend, LKI’s outlook showed prevailing prices of regular and well-milled commercial rice shall stay as the market price may remain at their current levels.
This, Dimagiba said, gives the National Food Authority (NFA) more reason to sell cheap rice, especially for the consumption of the bottom 30 percent of households.
“[The] government had been waiting for the market to behave by itself but almost a year since the rice tariffication law they can’t meet their target price. [Maybe] they were too optimistic last year that imports will bring prices faster [because] it [prices] did not [go down],” Dimagiba told the BusinessMirror.
The National Economic and Development Authority (Neda) said inflation in January 2020 remained within the expectations of the Bangko Sentral ng Pilipinas.
The BSP projects inflation to settle at 2.9 percent in 2020 and 2021, within the government’s target range of 2-4 percent.
However, Socioeconomic Planning Secretary Ernesto M. Pernia said the government needs to be vigilant and guard against upside risks that could cause prices to spike this year.
“Despite the relatively stable inflation outlook, we cannot be complacent, as the balance of risks remains on the upside for 2020 due to the effects of the Taal Volcano eruption, spread of African swine fever, and novel coronavirus (2019-nCov),” Pernia said.
University of Asia and the Pacific School of Economics Dean Cid Terosa told the BusinessMirror that inflation would remain within the range of 2.4 to 3 percent this year.
Terosa said this is largely due to external risks, particularly global supply disruptions caused by trade tensions, the novel coronavirus, and strong domestic demand.
In this light, Pernia said the country has intensified its preparedness for disaster risk response, including the formulation of recovery and rehabilitation plans, like in the areas affected by the Taal Volcano eruption.
“We should also increase investments in climate and disaster-resilient farm technologies and practices, and promote the adoption of such among farmers and fisherfolk,” Pernia said.