Finance Secretary Ralph Recto said the government is working double time to protect the purchasing power of the Filipino people from high food prices and keep inflation firmly within the government’s target range in 2024.
Data from the Philippine Statistics Authority (PSA) showed that inflation averaged 3.2 percent in the first 11 months of 2024, within the Development Budget Coordination Committee’s (DBCC) assumption of 3.1 percent to 3.3 percent and lower than 6 percent in 2023.
Recto said the easing of inflation is one of the major positive news this year despite the onslaught of several typhoons. “This is a product of the whole-of-government initiatives to ensure food security for our people. Because of this, we were also able to reduce interest rates twice, which will help spur economic growth,” Recto said.
The favorable domestic inflation outlook allowed the Bangko Sentral ng Pilipinas (BSP) to be the first in ASEAN to start its monetary policy easing, cutting policy interest rates by a cumulative 50 basis points and slashing reserve requirements across all financial intermediaries by 250 bps to boost growth.
The Department of Finance (DOF) said it put forward inflation-mitigating measures through the Economic Development Group (EDG) and the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO).
It said that with rice being a significant driver of inflation since September 2023 due to global price increases, it worked with other government agencies to ease domestic prices of key commodities, including rice, by adjusting tariffs as a short-term measure.
The President signed and issued Executive Order (EO) No. 62, series 2024 on the Comprehensive Tariff Program 2024-2028 on June 20, 2024. Implemented in July, the EO includes lowering the tariff on imported rice from 35 percent to 15 percent, which contributed to some moderation in retail rice prices in the local market.
Rice inflation continued its downtrend to 5.1 percent in November from 22.5 percent in June. The average retail price of imported rice in the National Capital Region (NCR) fell by about P3.66 per kilogram in the second half of November from second half of June 2024, before EO 62 was implemented.
The price decrease helped offset the impact of food price hikes caused by successive typhoons Nika, Ofel and Pepito, and the lingering effects of earlier storms in October and the El Niño in the first half of the year, the DOF said.
It said continued drop in rice prices, including the setup of more Kadiwa Stores nationwide, benefitted the bottom 30 percent of households as headline inflation for the said group declined to 2.9 percent in November 2024 from 5.8 percent in July.
To enhance local rice production and address the needs of rice farmers, the DOF supported the extension of the Rice Competitiveness Enhancement Fund (RCEF) until 2031 through the recent enactment of the Amendments to the Agricultural Tariffication Act.
The RCEF was given an annual appropriation of P30 billion to further improve rice farmers’ competitiveness and income.
