SEOUL – Domestic fuel and rice prices are expected to temper down amid the anticipation that the Philippines’ inflation rate would start to level off, economic managers announced here Tuesday.
Finance Secretary Carlos Dominguez III tried to assure Filipinos about the eventual drop in the country’s inflation rate even after it accelerated to 4.6 percent last May.
“It seems to me that the inflation rate is, I hope, levelling off. I think this is a sign of levelling off and probably dropping,” Dominguez said during a press conference on the sidelines of President Duterte’s official visit here.
“In the second half of the year, the inflation should be on the downtrend. In fact, the estimate for the inflation for next year is below 4 percent,” he added.
Dominguez cited that world oil prices have been on the “downtrend” based on the government’s close monitoring.
He said the price of future deliveries of fuel is “actually lower than the current prices.” “So we are seeing that trend doing down, he added.
Dominguez also highlighted that the moves involving the United States and North Korea are “going to calm the markets quite a bit.” He also expressed hope that the Middle East would be “calmer than what it has been past few weeks so fuel prices would not be too volatile.”
According to Trade Secretary Ramon Lopez, rice prices are also expected to decrease with the expected arrival of government-led imports this month.
“Even on the prices, we expect, for example rice, also to temper down in terms of pricing because we expect the importation to come in already by this first part of June,” he said in the same press briefing.
With the additional imports, Lopez said there would be National Food Authority (NFA) rice that would be sold again at P27 and P32 “to provide that accessibility to low-priced rice.”
“This will of course drag down even prices of commercial rice, which as you know, despite the lack of supply, we were able to still hold on it at the level of P39 to P49 for regular and well-milled rice,” he said.
Lopez said the trade department is closely monitoring prices of commodities including food products to ensure retailers abide with the agreed suggested retail prices. He added that the Department of Agriculture plans to impose SRP in agricultural products sold in markets too.
Dominguez, meantime, acknowledged that the latest inflation spike has been largely propelled by higher tobacco, rice, fish, and corn prices as well as world crude cost.
He assured that the government is “taking steps to stay ahead of the situation.”
“I would like to emphasize that TRAIN is not the sole reason for the increase in inflation. The effect of high global oil prices driven by unfavorable geopolitical events, along with the import quotas on rice have affected prices on a much larger scale,” he said.
He said the passage of the proposed rice tariffication law could be one of the best ways to address high food prices. Such proposal is expected to reduce inflation by around 0.4 percentage points if implemented in the third quarter.
“It will bring down rice prices by around P7 per kilo for the Filipino families and reduce inflation to below 4 percent by the second half of the year,” he said.