Government Eyes Inflation Control Despite October Rise

Finance Secretary Ralph G. Recto reassured the public that the Philippines remains on track with its inflation target for 2024 despite a slight increase in October, driven by temporary factors such as weather disturbances.

Rice inflation rose to 9.6% from 5.7% in September, primarily due to base effects from Executive Order (EO) No. 39, which set a price ceiling on rice in October 2023. I Photo: Philippine Information Agency

The country’s inflation rate edged up to 2.3% in October 2024 from 1.9% in September, still well below the 4.9% rate recorded in October 2023.

This uptick was largely due to food and non-alcoholic beverage inflation, which rose to 2.9% from 1.4% in September. The average inflation rate from January to October 2024 stands at 3.3%, within the government’s target range of 2% to 4%.

“Our whole-of-government approach, which includes intensive monitoring and efforts to curb price hikes, is expected to keep inflation within our target for at least the next two years,” Secretary Recto said.

The slight rise in October inflation was attributed mainly to temporary factors, including Severe Tropical Storm Kristine and Super Typhoon Leon. The government is actively assisting communities affected by these disasters, with President Marcos mobilizing agencies for relief and rehabilitation.

Rice inflation rose to 9.6% from 5.7% in September, primarily due to base effects from Executive Order (EO) No. 39, which set a price ceiling on rice in October 2023.

However, the Department of Finance (DOF) expects this rise to be temporary. Retail rice prices have been declining since the implementation of EO No. 62, which reduced rice tariffs from 35% to 15% in July 2024.

In the National Capital Region (NCR), the average retail price of imported rice dropped by PHP3.5 per kilogram in the latter half of October compared to June. This decrease has tempered food prices, even with typhoons Kristine and Leon affecting supplies in October.

DOF projects further reductions in rice prices as more imports enter the market, especially with the recent lifting of India’s export ban.

The DOF also urges traders to pass on the benefits of lower tariffs to consumers. Prices of other food items remain relatively stable, with pork inflation slightly lower at 3.5% compared to 3.7% in September.

Non-food inflation is also on a downtrend, marking its third consecutive month of easing.

Ongoing Efforts to Address Inflation and Disaster Impacts

In response to Severe Tropical Storm Kristine, the Department of Trade and Industry (DTI) imposed a 60-day price freeze on essential goods in areas under a state of calamity. The Department of Agriculture (DA) increased rice buying by the National Food Authority (NFA) and initiated early harvesting to boost stocks.

The Philippine Crop Insurance Corporation (PCIC) is expected to pay PHP 666.5 million in insurance claims to over 86,000 farmers affected by the storm.

Additionally, the Department of Social Welfare and Development (DSWD) has rolled out the Building on Social Protection for Anticipatory Action and Response in Emergencies and Disasters (B-SPARED) initiative, which aims to prepare communities for typhoons through social safety nets and capacity-building.

To combat African swine fever, the DA has expanded its vaccination program to include commercial farms and swine herds, while also ensuring a stable poultry supply and efficient broiler transport to maintain public health safety.