DA on 'guarded optimism' amid September inflation sharp slowdown

The Department of Agriculture (DA) on Saturday welcomed the sharp deceleration in the country’s inflation rate last month, which was mainly driven by the slowdown in food prices, particularly rice.

“Food prices have significantly declined from the highs posted in the same period last year, with vegetables such as onion and tomatoes, sugar, fish and rice leading the way with the help of various interventions of the Marcos administration,” Agriculture Secretary Francisco Tiu Laurel Jr. said in a statement.

Tiu Laurel said the Agriculture Department welcomes the development with “guarded optimism.”

In September, inflation clocked in at 1.9%, a sharp decline from the 3.3% rate seen in August, amid the slowdown in increments in food and transportation costs.

This is the lowest print since May 2020, when inflation clocked in at 1.6%.

In particular, food inflation, which tracks the price movements of food items in a "basket" commonly purchased by households, cooled down to 1.4% from 4.2% month-on-month.

The easing of food inflation last month was mainly due to the sharp decline in rice inflation at 5.7% from 14.7% in the prior month.

Rice, a staple in the consumer basket, accounts for 9% of the basket of goods and services used to track inflation rate for all consumers and double at 18% for families in the bottom 30% income bracket.

During the Saturday News Forum in Quezon City, DA Assistant Secretary and spokesperson Arnel de Mesa said, “We’re happy but with guarded optimism,” noting that supply risks could still affect inflation.

De Mesa said that during the “ber” months leading to the holiday season, demand increases which also influences prices of goods and services.

Nonetheless, the Agriculture official said that though price increments can be expected during the holidays, these will not be significant.

Tiu Laurel, in his statement, noted that rice prices would start reflecting the reduction in tariff on imported rice to 15% from 35% and the lifting of India’s export ban later this month.

The Agriculture chief, likewise, cautioned that the usually high demand ahead of and during the holiday season could temper the decline in food prices.

Both Tiu Laurel and de Mesa said that significant reductions in rice prices should be expected in January as rice inventory imported at higher prices and tariff are fully consumed. —KG, GMA Integrated News