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Inflation ends six-month decline, soars to 5.3% in August

by Carl Santos

Recently updated on September 7, 2023 10:51 pm

Inflation rose to 5.3% in August largely due to an increase in food prices, ending six consecutive months of decline, the Philippine Statistics Authority (PSA) reported on Tuesday.

This brings the year-to-date inflation to 6.6%, which is outside the government’s target of 2% to 4% by the end of 2023. Last month’s inflation was 4.7%. 

Rice inflation increased to 8.7% in August from 4.2% in July, which the National Economic and Development Authority (NEDA) attributed to the expected reduction in rice production due to El Niño and the export ban recently imposed by major rice exporters such as India and Myanmar that led to higher international rice prices. 

It also cited alleged hoarding incidents, artificial shortages, and speculative business decisions by market players.

Vegetable inflation went up to 31.9% in August from 21.8% in July due to production losses from the enhanced monsoon rains and Super Typhoon Egay, NEDA said.

Transport costs rose 0.2 percent in August, from an annual decline of -4.7% in July.

NEDA Secretary Arsenio Balisacan stressed the importance of providing comprehensive assistance to rice and vegetable farmers to help them increase their production. 

He also said the government needs to accelerate the implementation of the Food Stamp Program (FSP), which provides P3,000 worth of food credits to target beneficiaries each month for six months.

Other government support for consumers includes the Kadiwa stores, targeted cash transfers, and the Diskwento Caravan. 
Balisacan also called for a review of the existing tariff levels on rice to help lower the cost.

“To partially counterbalance the rise in global prices and alleviate the impact on consumers and households, we may implement a temporary and calibrated reduction in tariffs,” he said. 

The release of the latest inflation data coincided with the first day of the implementation of the price cap on rice.

Following a directive from President Ferdinand “Bongbong” Marcos Jr., retailers adjusted the price ceiling for regular milled rice to P41 per kilogram and P45 per kilogram for well-milled rice.

A price ceiling ”will immediately reduce the price of rice and penalize and consequently discourage hoarding, further decreasing the price of rice,” the NEDA said.



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