Albay 2nd District Rep. Joey Salceda at Kapihan sa Manila Bay. INQUIRER FILE PHOTO
MANILA, Philippines — Albay 2nd District Rep. Joey Salceda has warned the government that while headline inflation rates for October 2023 have decelerated, food prices remain high and should be closely monitored.
Salceda, in a statement on Tuesday, said that the 4.9 percent inflation rate for October 2023 is favorable, considering the decrease in prices of key products like corn, which are commonly used as feeds for livestock and poultry.
But the lawmaker — an economist by profession — warned that the government needs to watch for food inflation, as it seems consumers are putting their money on food instead of recreational activities. This, therefore, creates additional demand for food items, eventually raising prices.
“Food inflation remains high at 7.0 percent, while recreational services are experiencing a very low 0.1 percent inflation. What could be happening is disposable income is being largely spent on food instead of recreational activities,” Salceda said.
“This has implications on economic growth, especially in the fourth quarter,” he added.
Salceda also mentioned that flour prices have increased even if wheat prices have declined — which may necessitate the government to check for possible abuse.
“Flour is also at the high 7.4 percent inflation level, even as world wheat prices have declined by as much as 32 percent year-on-year. We should look at market dynamics and see whether abuse is taking place in the domestic market,” he explained.
For rice, the lawmaker expects prices to remain high, but Salceda said this could be countered by reducing wastage to ensure higher supply — and eventually bring down prices.
“Rice prices should normalize but will remain elevated in 2024. The Food and Agriculture Organization recorded a 2 percent month-on-month reduction in aggregate world rice prices [in] September vs. October due to weak import demand. What is within our control now is to reduce wastage in the October domestic rice harvest by improving our post-harvest facilities and practices,” Salceda said.
“As much as 17 percent of our total palay harvest is wasted due to poor post-harvest practices. If we can significantly reduce this number, we should be able to make a dent in import demand and reduce our vulnerability to global rice price shocks,” he added.
Earlier, the Philippine Statistics Authority (PSA) released a report showing that headline inflation rates dropped from 6.1 percent in September 2023 to just 4.9 percent in October due to a slower rise in food prices.
But PSA also admitted that while inflation slowed down in October, the country’s 10-month average is still at 6.4 percent, which is above the Bangko Sentral ng Pilipinas (BSP) target of a two percent to four percent average annual inflation rate.
The lawmaker, an economist by profession, also noted that oil prices have decreased, but they may stay high due to a spike in global demand during the holiday season.
“Oil prices, while still above 80 USD per barrel, declined from 90 USD per barrel, and fears of a spike in global oil prices did not materialize. Higher oil demand due to the -ber months will likely keep oil prices above USD 75 for the next few weeks, however. So, I expect very moderate deceleration of inflation in the operation of personal transport,” he added.
READ: Romualdez says House is looking for ways to ease impact of high prices
Earlier, Speaker Ferdinand Martin Romualdez assured the public that the House would continue working towards shielding Filipinos from the impact of high prices of goods, saying that global economic headwinds are still present — which require initiatives in anticipation of external shocks.