THE government’s economic team is confident that the implementation of the Rice Industry Modernization Act (RA 11203) will further slow down the inflation rate in the country this year.
The Philippine Statistics Authority (PSA) announced Tuesday, March 5, that headline inflation rate slowed down to 3.8 percent in February from 4.4 percent in January.
The economic team, which is composed of the Department of Finance, National Economic and Development Authority, and Department of Budget and Management, traced the slowdown to the slower price increases in most commodity groups.
"Inflation of food and non-alcoholic beverages eased to 4.7 percent in February 2019 from 5.6 percent in January 2019, slightly lower compared to the 4.8 percent in the same month last year," the economic team said.
The team was optimistic that the downward trend of inflation will continue for the rest of the year.
"This will be backed by the recent enactment of the Rice Industry Modernization Act (RA 11203), which is expected to bring down rice prices and cut inflation by 0.5 to 0.7 percentage point this year and 0.3 to 0.4 percentage point next year," the team said in a joint statement issued Tuesday.
The team pointed out that "rice inflation significantly moderated to 2.9 percent from 4.7 percent in January 2019 on the back of stable rice supply."
Data from PSA showed that prevailing retail prices of regular-milled rice have declined by P5 per kilo since these peaked in September 2018.
"We must ensure that the change to a rice tariff regime — from government-led to market-led — is seamless and fast," the team said.
Neda is taking the lead in the drafting of the Implementing Rules and Regulations (IRR) for the new law. Consultations were held last week to generate inputs for the IRR.
"The new regime will include the operationalization of a National Single Window system, which will facilitate seamless trade transactions," the economic team said.
To ensure that inflation rate stays within government’s target range of 2.0 to 4.0 percent, the economic team said it will keep a close watch on the prices of agricultural produce with the onset of El Niño, which is expected to last until June 2019.
Likewise, it will also be monitoring closely the changes in the global oil market. The changes in the prices of food and oil contributed largely to the surge in the inflation rate in the second half of 2018.
"Nevertheless, the economic team is upbeat that inflation is again starting to become manageable. While we constantly keep a close watch on the general prices of goods, we can now pay greater attention to programs that will further propel economic growth and help us reach our long-term development goals," the economic team said.
Meanwhile, the PSA also noted that inflation rates in the different regions have also slowed down.
"The same trend was also recorded in the inflation for AONCR (Areas outside NCR) as it eased further to 3.8 percent in February 2019. Inflation in the previous month was 4.4 percent and in February 2018, 3.6 percent," PSA said.