Rice inflation quickened to new 14-year high in January — PSA

Despite the continued slowdown in the overall inflation seen in January, the faster rate of increase in the prices of rice persisted during the period, the Philippines Statistics Authority (PSA) reported on Tuesday.

At a press briefing, PSA chief Claire Dennis Mapa said rice inflation accelerated to 22.6% last month from 19.6% in December 2023.

This is a new 14-year high for the food staple’s inflation rate or the highest since March 2009, when rice inflation was recorded at 22.9%.

Mapa explained that rice prices are significantly high in the world market.

The PSA chief also attributed the faster rice inflation to the low base effect seen in January to July 2023, when rice inflation was “relatively low.”

“May mababang base na pinanggalian ang presyo ng bigas (Rice prices came from a low base),” Mapa said.

To illustrate, he said the PSA monitored that the movements in the average prices of three main rice classes —regular milled, well-milled, and special— saw about P10 to P11 per kilogram increase year-on-year.

For regular milled rice, Mapa said the average price was at P49.65 per kilogram in January 2024, up 25.4% from P39.60 per kilogram in January 2023.

The average price of well-milled rice also saw an about 25% increment to P54.91 per kilogram last month from P43.92 per kilogram year-on-year.

For special rice, the average price stood at P63.90 per kilogram, up by 18.9% from P53.76 per kilogram in the same month last year.

“Sa world market mataas ang presyo ang tinitignan natin. Sa discussion with Department of Agriculture (DA) nakikita nila patuloy ang pagtaas,” Mapa said.

(In the world market, we are seeing high prices. In our discussion with the Department of Agriculture, they expect that rice prices will continue to go up.)

“Our expectation is we will have rice inflation in the vicinity of 20% or higher until July,” the PSA chief said.

Food production concerns

In a separate statement, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the DA would continuously monitor on-the-ground situations and adequately guide the government in addressing food production concerns.

“The Philippines also recently signed a Memorandum of Understanding with Vietnam for the continuous supply of at least 1.5 to 2 million metric tons of rice annually,” Balisacan said.

The NEDA chief said the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) will continue to closely monitor the prices of rice and other goods “to provide the President and the Cabinet with timely and appropriate policy recommendations and ensure stable and affordable prices of commodities.”

The administration’s chief economist added that with the El Niño lingering until May, "we introduce stop-gap measures, as necessary, such as allowing further imports on key commodities until our supply stabilizes at prices affordable to consumers while ensuring remunerative prices for local producers."

Time to harvest

For its part, the Agriculture Department said rice harvests have already begun in some areas and are expected to peak in the next two months, which could help ease prices in the coming months.

Agriculture spokesperson Assistant Secretary Arnel De Mesa said, "Nag-start na ulit harvest and then March, April magpe-peak 'yan so we can expect na bababa din kaunti presyo natin pagdating ng harvest season."

(Harvests have already started this month, and then in March, April, these will peak so we can expect prices to decrease slightly.)

International rice prices have put pressure on local prices as demands increase globally in anticipation of the effects of El Niño.

De Mesa said international prices, which began to ease last month, influence local prices. Imported stocks, he said, add to overall rice inventory in the country.

"'Yung presyo, halimbawa, ng 25 percent broken ng Vietnam noong December 2022  was $388 per metric ton. Noong 2023 January, $429 'yan. Noong December last year and presyo ng 25 percent ay pumalo ng 609 [dollars], tapos January ngayon medyo bumaba, 600 [dollars]," De Mesa said.

(For example, the 25% broken by Vietnam in December 2022 was $388 per metric ton. In January 2023, that was $429. In December last year, the price of 25% reached 609 [dollars], then now in January, it decreased to 600 [dollars]).

Vietnam has also committed to supply the Philippines with at least 2.5 million metric tons of rice as the Philippines grapples with the effects of the El Niño phenomenon.

"Kahit may El Niño, kahit may ibang calamity, so assured tayo at least [may shipment] from Vietnam of that volume," De Mesa said.

(Even with the El Niño, even if there is a calamity, at least we are assured that [there is a shipment] from Vietnam of that volume.)

The DA is also focused on the expansion and improvement of farming areas through irrigation and improvement of facilities to decrease post-harvest losses. — with a report from Bernadette Reyes/RSJ/VDV, GMA Integrated News