Philippines Pushes for Rice Price Cap Extension as Inflation Cools

MANILA, Philippines — Lower food prices, particularly rice, helped ease inflation in June, prompting the National Price Coordinating Council (NPCC) to endorse to the Office of the President the Department of Agriculture (DA)’s recommendation to extend by two months the government’s P50-per-kilo price cap on imported rice. Headline inflation eased to 6.4 percent in June from 6.8 percent in May, according to the Philippine Statistics Authority, extending a recent downtrend as food prices showed signs of easing after months of sustained pressure. “The latest inflation numbers show that keeping food affordable delivers real benefits to Filipino families, especially those who spend a large portion of their income on basic necessities,” Agriculture Secretary Francisco Tiu Laurel Jr. said. “We must continue ensuring adequate supply, efficient distribution, and reasonable prices, particularly for rice, so inflation remains manageable while consumers and farmers alike are protected,” he added. Executive Order 118, signed on May 13, imposed a P50-per-kilo cap on five percent broken imported rice for a period of 30 days. “We have to wait for the review process of the Office of the President. They could either extend it, since it expired on June 13, or set a new start date for another 60 days,” Agriculture Assistant Secretary and spokesperson Arnel de Mesa said in a press briefing. Tiu Laurel said the latest inflation figures reinforce the importance of extending the P50-per-kilo price ceiling on imported rice, alongside measures to maintain sufficient inventories and improve the flow of food from farms to markets. Food inflation slowed to 5.4 percent in June from 5.8 percent a month earlier, with softer increases in rice and fish prices and a steeper decline in meat prices helping temper overall price growth. Rice inflation eased to 15 percent from 15.6 percent, while fish inflation slowed to 7.8 percent from 8.8 percent. Food and non-alcoholic beverages remained the biggest contributor to overall inflation, accounting for two percentage points of the June headline rate. The easing in food prices also provided some relief to lower-income Filipinos. Inflation for the bottom 30 percent of income households slowed to eight percent in June from 8.4 percent in May,“ indicating that moderating prices of essential goods are beginning to ease cost-of-living pressures on the country’s most vulnerable families, whose spending is heavily concentrated on food and other necessities.” Food remains the biggest driver of inflation, with cereals and cereal products, including rice, accounting for 68 percent of food inflation, followed by fish and seafood at 25 percent and vegetables at 15 percent. While inflation remains above the government’s target, June’s figures suggest that efforts to stabilize food supply and moderate rice prices are gaining traction. “For policymakers, the data underscore a familiar reality: keeping staple food affordable and readily available remains one of the most effective tools for keeping inflation in check,” the DA said. The move was meant to address further price increases in rice, prevent market abuse and ensure the availability of affordable grain while maintaining market stability. The country is entering its wet?season rice harvest, which typically begins in the second half and provides the bulk of the domestic supply. Tiu Laurel has earlier said that retailers had raised their prices after last month’s expiry of the price cap, calling the move “profiteering.” “That’s why we requested that an order be issued immediately to control inflation, especially at this time,” he added. Information Source: Philstar Business