Finance Secretary Ralph G. Recto has credited the easing of the 2024 average inflation rate to 3.2%—well within target—to effective government interventions that sustained the moderation of rice prices, providing much-needed relief to low-income families.

The country’s average inflation rate in 2024 was significantly lower than 6.0% in 2023 and 5.8% in 2022.

Prices of key items such as food and non-alcoholic beverages rose at a slower pace by 4.4% in 2024 from 7.9% in 2023. Similarly, the annual average inflation for housing, water, electricity, gas, and other fuels slowed to 1.7% in 2024 from 4.9% in the previous year.

“With the President’s decisive leadership, whole-of-government approach, and concerted efforts of stakeholders, we were able to manage the inflation to finally settle within our target after two years. The sustained moderation in rice prices is particularly a welcome relief especially to our lower-income households and highlights the positive impact of our interventions. Lalo pa po naming pagbubutihin ang aming trabaho para tuloy-tuloy ang pagbaba ng inflation at mas mapagaan ang buhay ng bawat Pilipino,” the Finance Chief said.

Rice inflation, in particular, recorded a significant drop to 0.8% in December 2024 from 5.1% in November 2024 and 19.6% in December 2023.

Rice only contributed 0.07 percentage points in the December 2024 inflation or 2.3% to total inflation. This was a decrease from the 0.45 percentage points or 18.0% contribution of rice to total inflation in November 2024.

Rice prices have been steadily declining as a result of the implementation of Executive Order (EO) No. 62 in July 2024, which lowered import tariffs on rice.

This also helped offset the lingering effects of high prices of food commodities due to the onslaught of typhoons Nika, Ofel, and Pepito in November 2024.

In the National Capital Region (NCR), the average retail price of imported rice for the second half of December 2024 went down by PHP 4.07 per kilogram (kg) from the second half of June 2024, prior to the implementation of the said EO.

The continued drop in rice prices has benefitted the bottom 30% of households as headline inflation for the said group declined to 2.5% in December 2024 from 2.9% in the previous month and 5.0% in December 2023.

The main source of inflation deceleration for the lower-income group was food and non-alcoholic beverages accounting for a sizable 97.3% of the downtrend.

Rice, which makes up 31.7% of the inflation rate for this group, registered minimal inflation at 0.7% in December 2024 from 5.4% in November and a staggering 21.4% in December 2023.

Government’s Intensified Interventions to Mitigate Food and Non-Food Inflation

Prior to the implementation of EO 62, the President signed EO 50, extending the reduced Most Favored Nation (MFN) tariff rates under EO No. 10 on rice, corn, and meat of swine. This, along with the implementation of the lower tariff on rice under EO 62 and falling prices in the international market, have helped in moderating price increases in food commodities and is expected to further stabilize prices.

This development continues to pose a downside risk to the inflation outlook, which could allow the Bangko Sentral ng Pilipinas (BSP) to further ease monetary policy rates.

The government likewise expects to improve local rice production, address the needs of rice farmers, and maintain rice price stability through the implementation of Republic Act (RA) No. 12078. The law extends the Rice Competitiveness Enhancement Fund (RCEF) until 2031 and increases its annual appropriation to PHP 30 billion from PHP 10 billion.

Meanwhile, the expansion of Kadiwa ng Pangulo (KNP) sites to 300 by mid-2025 will provide Filipino families with affordable goods, including rice, along with new initiatives such as the “Sulit” and “Nutri” rice programs that aim to provide cost-effective and nutritious rice for consumers.

The Department of Finance (DOF), through the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO), also continues to support the implementation of measures aimed at mitigating food inflation on key commodities, including pork through the procurement of more African swine fever (ASF) vaccine doses and its expanded roll-out.

The DOF also supports the staggered implementation of electricity rate hikes and an enhanced lifeline program on water services that offers higher discounts to support low-income customers to help mitigate the impact of non-food inflation.