Basic food items, such as rice, fish, meat and vegetables, have been major drivers of inflation this year with the contribution of rice rising 10 times to 1 percentage point of the inflation rate, the Department of Finance (DOF) said in a statement on Thursday.
According to the Philippine Statistics Agency (PSA) data, rice was the number one contributor to inflation last month, while food items in the consumption basket accounted for more than half of the inflation rate in the same month.
In its presentation during the latest Cabinet meeting, the DOF bared that in contrast, the contribution of non-food items, such as electricity, gas and other fuels, has slowed down since July this year.
“Rice tariffication and reforms in food policy are needed to address the repeated rice supply problems,” Finance Secretary Carlos Dominguez III said during the Cabinet meeting.
According to the department, the rice tariffication bill, once passed into law, is expected to liberalize the importation of rice in the country and help reduce rice prices while providing enough support for local farmers who will be affected by the influx of cheaper rice imports.
This measure has been certified as urgent by President Duterte. Economic managers said liberalizing rice imports will reduce the retail price of rice by Php2 to Php7 per kg., based on latest estimates, and reduce inflation rate by 0.4 percentage points.
Among the short-term measures recommended by the DOF during the meeting were for the Department of Agriculture (DA) to undertake steps to bring down food prices, and for the departments of social welfare and transportation to speed up the release and distribution of cash cards to the poorest households and fuel subsidy cards to operators of public utility vehicles, respectively.