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August inflation slows to 2.4%; Neda says agri supply chain key to keeping prices stable

File photo: A local market vendor displays a list that shows the prevailing retail price of freshly harvested vegetables.

BOOSTING the country’s agriculture supply chain could help keep commodity prices nationwide stable in the coming months, according to the National Economic and Development Authority (Neda).

On Friday, the Philippine Statistics Authority (PSA) said inflation slowed to 2.4 percent in August from the 2.7 percent posted in July. However, this was still higher than the 1.7-percent inflation rate posted in August 2019.

In a statement, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said improving supply chain efficiency in agriculture will ensure a low and stable inflation in the country amid the ongoing Covid-19 pandemic and impending typhoons.

“Investments in cold storage facilities and innovations in food packaging and processing need to be increased as well, alongside the boosting of agricultural production, both in rural and urban areas, through the government’s Plant, Plant, Plant program,” Chua said.

Chua also underscored the need to effectively manage the supply and allocation of agricultural commodities to ensure enough buffer stock, prevent wastage and spoilage, and minimize the losses of farmers. This includes facilitating the delivery of vegetables and other agricultural commodities to Metro Manila and other regions.

To mitigate possible losses and ensure quick response to possible disaster-prone areas, he also highlighted the need for preemptive preparations on production support, crop insurance, and other recovery programs, as La Niña is seen to come by late September or October.

With the PSA’s latest report, year-to-date inflation is at 2.5 percent. Food inflation eased to 1.7 percent from last month’s 2.5 percent as the prices of rice continued to decline.

Neda attributed this lower inflation to the unhampered movement of food and other essential commodities across the country, as well as the benefits of the rice tariffication law, ensuring ample supply.

“As we continuously implement varying levels of community quarantines and localized lockdowns in the country, we need the government and the private sector to tap local agricultural produce and maximize the use,” Chua said.

Poorest Filipinos

Data showed that inflation for the bottom 30 percent income households at the national level decelerated further to 2.7 percent in August 2020.

This brings the year-to-date inflation for this income group of consumers to 2.7 percent. In July 2020, inflation for the bottom 30 percent income households was observed at 2.9 percent, and in the same month of the previous year, 1.7 percent.

The slower annual rate in the index of the heavily weighted food and non-alcoholic beverages at 1.1 percent primarily pushed down the overall inflation during the month.

The country’s food inflation slid further to 1.1 percent in August 2020. In the previous month, the annual rate of food index was higher at 1.5 percent, while in August 2019, inflation was at -0.2 percent.

The indices of the following food groups exhibited annual negative growth rates during the month were Rice, -1.4 percent; Corn, -0.6 percent; Vegetables, -0.3 percent; and Sugar, jam, honey, chocolate and confectionery, -0.1 percent.

Image credits: Bernard Testa



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