Finance Secretary Ralph G. Recto has assured the public that the government is all hands on deck in countering the impact of El Niño on food security and is proactively preparing to face the imminent threat of La Niña

“The Department of Finance [DOF] is strictly monitoring the developments in food inflation, particularly rice and other key commodities, so we know which areas to focus our efforts on. We have been working closely with the Department of Agriculture [DA] to fast-track the implementation of interventions in ensuring sufficient supply through improvements in agricultural production and timely importation of key commodities,” Secretary Recto said.

“The Inter-Agency Committee on Inflation and Market Outlook has been all hands on deck in addressing the increase in prices and ensuring food security for our people. We have kept inflation within the target band so far despite the ongoing El Niño season, and we will continue to do so while proactively preparing for La Niña,” he added.

Headline inflation for April 2024 was recorded at 3.8%, significantly lower than the 6.6% in April 2023. 

This brings the year-to-date inflation rate to 3.4%, well within the government’s target band of 2% to 4% despite the strong effects of El Niño and other external challenges. 

The April 2024 inflation was also within the Bangko Sentral ng Pilipinas’ (BSP) forecast of 3.5% to 4.3% and was significantly lower than private analysts’ median forecast of 4.1% for the month. 

The main contributors to April 2024 inflation were food and non-alcoholic beverages (2.3 percentage points or ppts), food and beverage serving services (0.4 ppt), and actual rentals for housing (0.4 ppt).

Notably, rice prices have slowed down for the first time in six months, easing to 23.9% in April 2024 from 24.4% in the previous month.

In particular, the prices for well-milled rice decreased to PHP 56.42 per kilo (previously PHP 56.93), while special rice was cheaper at PHP 64.68 (previously PHP 64.79) compared to the previous month.

The easing of rice inflation in the local market was mainly due to a gradual decline in the world price of rice during February and March of 2024.

Non-food inflation, on the other hand, registered a modest uptick of 3.6% in April 2024 due to a slight increase in transport prices by 2.6% from 2.1% in the previous month.

Nevertheless, these were tempered by slower price increases in restaurants and utilities as well as electricity, gas, and other fuels.

Government’s intensified interventions to mitigate food inflation

The DOF is closely monitoring the accelerated implementation of interventions among relevant agencies to ensure a stable and affordable supply of food products for Filipinos.

Overall, these include enhancing agricultural productivity; expediting the creation of the National La Niña Action Plan on Food Security; ensuring timely importation to address domestic supply gaps; and reinforcing efforts to combat anti-competitive practices.

Specifically, the DOF and key concerned agencies are monitoring the efficient implementation of Administrative Order No. 20, which was signed by President Ferdinand R. Marcos, Jr. on April 18, 2024. This streamlines administrative procedures and policies, and removes non-tariff barriers to the importation of agricultural products.

AO No. 20 would aid in the timely arrival of agricultural imports to augment the deficit in local production and swiftly meet the country’s demand at affordable prices.

Meanwhile, the DA has thus far provided PHP 524.4 million worth of PHP 3,000 fuel subsidies to fishermen and farmers in response to the rise in retail prices of petroleum products.

It is planning to distribute additional fuel assistance cards to 232,128 beneficiaries, amounting to PHP 731.2 million in the coming months.

The DA has also been continuously distributing cash-aid assistance to farmers through the Rice Competitiveness Enhancement Fund (RCEF)-Rice Farmers Financial Assistance (RFFA), with a total of PHP 1.25 billion provided to those in Regions II, IV-B, and XII.

Insurance and credit support are also being extended to farmers and fisherfolk, with around 7,332 of them already provided with indemnification worth PHP 68 million by the Philippine Crop Insurance Corporation (PCIC).

The government is also ramping up the improvement of the country’s irrigation systems through the National Irrigation Administration (NIA), which recently inaugurated the PHP 5.1 billion Malitubog-Maridagao Irrigation Project (MMIP) Stage II in North Cotabato last April 30, 2024.

The project is expected to benefit 4,000 farmers in the region and will cover 9.5 hectares of agricultural land.

Meanwhile, to help mitigate the second-round effects of toll rate hikes on food inflation, the national government shall soon implement the recently approved exemption of trucks catering to agricultural goods from toll rate hikes for an initial period of 3 months.

“Rest assured, we are doing all that we can to keep the inflation rate within manageable levels and this remains a top priority of the Marcos, Jr. administration. Inflation is an unwarranted burden that our people should not bear,” Secretary Recto said.

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