FOOD prices are expected to peak this July, the Department of Finance said.
“Food price inflation is expected to peak this month as imports rise to boost domestic supply. Bolstering food productivity is necessary for long-term food price stability,” Finance Undersecretary and Chief Economist Gil Beltran said in his economic bulletin on Wednesday.
Food price inflation maintained its pace in June at 4.88 percent, unchanged from May’s 4.87 percent.
Beltran also said average prices of rice, fruits, and vegetables declined by 1.10 percent, 0.64 percent, and 2.71 percent, respectively, muting the higher-than-average inflation in the prices of meat (19.24 percent) and fish (8.66 percent).
To recall, Socioeconomic Planning Secretary Karl Kendrick T. Chua last week said Executive Orders (EO) 133 and 134 allowing the increase in Minimum Access Volume for pork imports and the temporary reduction of pork tariffs helped slow the increase in meat prices to 19.2 percent in June 2021 from 22.1 percent in April and May.
Chua also said the issuance of EO 135 to temporarily reduce the most favored nation (MFN) tariff rates on imported rice to 35 percent from 40-50 percent helped keep rice prices low. Data from the Philippine Statistics Authority showed rice prices contracted 1.1 percent in June 2021, a sharper decline compared to the contraction of 0.8 percent in May 2021.
Despite the expected rise in imports due to the EOs, Beltran told the BusinessMirror, “it takes time for new shipments to come in and the volume must be large enough before prices start to normalize.”
In a message, he said, “Remember—imports don’t get ordered today and arrive tomorrow.” Nonetheless, the finance official expressed confidence that food prices will soon ease. “What is important is prices have peaked and will soon come tumbling down,” he added.
Meanwhile, Beltran said the rise in crude oil prices in June was spurred by the boost in oil demand amid global recovery.
In June, transport and electricity inflation rose as Dubai crude oil price surged to $70.96/barrel, up 7.5 percent from $65.98 in May 2021 and 76.8 percent from $40.14/barrel in June 2020.
Beltran, however, said the effect of oil price adjustments on the country’s inflation was tempered by the use of energy-efficient technologies.
“A quick pass-through of international crude oil prices on domestic prices is desirable since the country is an oil importer. The use of more energy-efficient technologies has allowed the country to trim down the impact of oil price adjustments on domestic inflation,” he said.
Inflation eased to 4.1 percent in June, slower than the 4.5-percent inflation recorded in May 2021 but still higher than the 2.5 percent posted in June 2020.
Inflation has now reached an average of 4.4 percent in the first half of the year, above the government’s target range of 2 to 4 percent for the year.
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