Rice inflation quickens to 14-year high of 17.9% in September

The inflation rate for food staple rice quickened to its fastest in 14 years in September, despite the imposition of price control measures for two rice varieties commonly purchased by households during the period, according to data released by the Philippine Statistics Authority (PSA).

At a press briefing on Thursday, National Statistician and PSA chief Claire Dennis Mapa said rice’s inflation clocked in at 17.9% last month from 8.7% in August.

This is the fastest inflation print for the commodity since March 2009, when rice inflation stood at 22.9%.

The PSA chief said rice has a weight of 8.87% for the overall inflation rate of 6.1% in September.

Rice is also the main culprit for the faster food inflation for the month at 10% from 8.2% in the preceding month.

Rice’s double-digit inflation came despite the issuance of Executive Order No. 39, which mandated price caps of P41 per kilogram for regular-milled rice and P45 per kilogram for well-milled rice.

The price control measures had been in effect since September 5. It was lifted by President Ferdinand Marcos Jr. on Wednesday, October 4.

Asked if the price caps on rice were effective in controlling inflation for the staple, Mapa said the compliance on the price cap was “mixed” in certain areas.

In particular, the PSA chief said that “for regular-milled rice, out of 2,601 items, we saw that only 640 [products] fell within the price cap of P41 per kilo or below.”

“For the well-milled rice, the total number of [products] we tracked was 3,498, but only 687 or 20% fell within the price cap of P45 per kilo,” Mapa said.

The PSA chief admitted that determining the effectiveness of the price control measures needs further study.

“We are still looking at the data of what could have happened if there was no price cap. It needs further research on the ‘counterfactuals’ to see the impact,” Mapa said.

Data released by the Department of Trade and Industry (DTI), however, showed that the nationwide compliance with the mandated price ceilings for the two rice varieties was at 81.46% as of September 28.

The average selling price for regular-milled rice was at P41.05 per kilo, while for well-milled rice, the average selling price was at P45.31 per kilo.

The caps on retail prices of the two rice varieties were imposed amid the skyrocketing prices in local markets, which surged to as high as P70 per kilo.

Hoarding, profiteering, and artificial shortage were blamed for the higher rice prices, which compelled the President to order a crackdown on cartels or those abusing their dominant position in the market to ensure fair market competition and uphold consumer welfare and protection.

In a separate statement, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the government, through the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO), is proactively monitoring the demand-and-supply situation, particularly of key commodities, to provide the President and Cabinet with appropriate and timely policy recommendations.

“In line with this, we are closely monitoring both local and global markets in terms of price movement, as they may be affected by the availability of supply or disruptions in the supply chain,” said Balisacan.

During the last IAC-IMO meeting on October 3, the committee recommended extending the lower Most Favored Nation (MFN) tariff rate on rice under Executive Order (EO) No. 10.

“To address the increasing price of rice and ensure enough supply through timely and adequate importation, the IAC-IMO recommends extending the lower MFN tariff rate on rice until December 2024, but subject to review in July 2024. This policy response must be complemented by efforts to improve the predictability and transparency of issuing the Sanitary and Phytosanitary Import Clearance for rice and all commodities,” said the NEDA chief.—AOL, GMA Integrated News