Gov’t to implement stronger measures to ensure food security

MANILA – The National Economic and Development Authority (Neda) on Tuesday assured that the government is implementing crucial interventions to support the most vulnerable sectors and ensure food security amid La Niña and the higher inflation recorded in July.

“The government is relentlessly working to address our nation’s most pressing concern of ensuring food security for every Filipino amid the faster rise in prices in July and the expected typhoons and rains due to the onset of La Niña this August,” Neda Secretary Arsenio Balisacan said in a statement.

READ: July inflation accelerates to 4.4% – PSA

The Philippine Statistics Authority (PSA) reported that headline inflation settled at 4.4 percent in July, higher than the 3.7 percent in June this year.

The increase was primarily driven by higher inflation in food and non-food items, with notable upticks in housing prices, utilities, fuel, meat, corn, and fruits.

In a briefing, National Statistician Dennis Mapa said that food inflation went up to 6.7 percent from 6.5 percent in June.

Mapa said the increase was attributed to higher inflation rates for meat (4.8 percent from 3.1 percent), corn (17.5 percent from 13.1 percent), fruits (8.4 percent from 5.6 percent), eggs and other dairy products (1.8 percent from 1.3 percent), and ready-made food products (6.0 percent from 5.9 percent).

According to Mapa, the recent weather disasters affected agricultural commodities and contributed to the higher prices of vegetables.

“So pwede na nagstart na yung impact. But expectation is that normally sa ating historical data, pagkatapos ng typhoon, tumataas price ng vegtable, yun yung isa. Dun tayo may expectation na pwede tumaas itong August 2024. (So it’s possible that the impact already started. But the expectation is that normally in our historical data, after a typhoon, prices of vegetable go up. Our expectation is [prices] may also increase this month),” said Mapa.

Rice inflation, however, went down to 20.9 percent from 22.5 percent.

READ: Salceda says inflation spike shows looming problem with corn

Mapa said rice inflation may fall below 20 percent this month, due to base effects and the impact of the rice tariff reduction.

For non-food items, transportation inflation rose to 3.6 percent from 3.1 percent in June, which Neda said was driven by the increase in global petroleum prices due to the unexpected large withdrawals of United States gasoline stocks, optimistic fuel demand forecasts, and the ongoing geopolitical tension in the Middle East.

Housing and utilities inflation meanwhile also went up to 2.3 percent from 0.1 percent, while electricity (-5.4 percent from -13.7 percent) recorded a slower deflation.

This change is attributed to the rise in international contract prices of liquefied petroleum gas (LPG) and the increase of Meralco rates in July.

The Wholesale Electricity Spot Market charges normalized after the Energy Regulatory Commission ordered a staggered collection of May generation costs.

Gov’t interventions

NEDA said that while rice prices already started to ease, the Department of Agriculture launched the Rice-for-All Program to ease the burden of elevated rice prices.

Under the program, rice will be sold at P45 per kilo at selected Kadiwa centers, with prices adjusted according to the fluctuations in rice prices.

In preparation for La Niña, DA also assured the availability of the quick response fund, assistance, credit, and seed buffer stock. The agency has also expedited the declogging of farm drainage systems and the construction of water-impounding projects and post-harvest facilities.

To assist farmers in dealing with higher fuel prices, DA will provide around P510 million in fuel subsidies to crop, livestock, and poultry farmers. It is anticipated that around 160,000 farmers will benefit from over P3,000 in fuel assistance between August and September this year.

“Between 2023 and 2021, about 2.5 million Filipinos were lifted out of poverty, bringing our country’s poverty incidence down to 15.5 percent from 18.1 percent. Our goal now is to sustain this momentum by addressing the constraints to food security and economic development more broadly,” Balisacan said.

“We emphasize that the country’s economic gains are intended to benefit all Filipinos. The government’s economic policies aim to alleviate poverty by ensuring that all Filipinos can afford their basic needs and achieve a decent standard of living toward a matatag, maginhawa, at panatag na buhay para sa lahat (stable, prosperous, and peaceful life for everyone,” he added.

Medium-term inflation path

In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said the latest inflation data is consistent with its assessment that inflation will temporarily breach the government’s target in July due to higher electricity rates and positive base effects.

The BSP however noted that inflation will likely follow a general downtrend beginning in August 2024.

“The balance of risks to the inflation outlook has shifted to the downside for 2024 and 2025 due largely to the impact of the lower import tariff on rice under Executive Order (EO) 62 (Series of 2024),” said the BSP.

The BSP however said higher prices of food items other than rice, as well as higher transport and electricity charges continue to pose upside risks to inflation.

“The Monetary Board will consider the latest inflation outturn as well as the Q2 (second quarter) 2024 national accounts in its assessment of the inflation outlook and the balance of risks in the August 2024 monetary policy meeting,” said the BSP.

“Moving forward, the BSP will ensure that monetary policy settings remain in line with its primary mandate to safeguard price stability conducive to sustainable economic growth,” it added.