Romualdez: Cheaper rice at Kadiwa stores helped slow August inflation

MANILA, Philippines — Inflation figures for August 2024 slowed down because of the government’s decision to sell cheaper rice at Kadiwa stores, House of Representatives Speaker Ferdinand Martin Romualdez said on Friday.

Romualdez in a statement was referring to Program 29, a program of the Department of Agriculture (DA) where rice is sold at P29 per kilogram in select Kadiwa sites every Friday, Saturday, and Sunday.

READ: Gov’t rolls out ‘P29 per kilo’ rice program for low-income folk

According to the Speaker, President Ferdinand Marcos Jr.’s decision to cut down the tariff on imported rice also contributed to this.

“We will help the President by approving pieces of legislation and exercising our oversight power to keep prices down, untangle bottlenecks in the distribution chain that push prices up and to expose abusive practices like hoarding and price manipulation,” Romualdez said.

“It was meant to be. It was not a fluke,” he said.

On Thursday, the Philippine Statistics Authority said that headline inflation rates for August 2024 eased to 3.3 percent, the slowest rate in seven months due to a slower rise in food and transport costs.

This is lower than the 4.4 percent rise in the prices of goods and services recorded in July, and the 5.3 percent in August 2023.

READ: Philippine inflation eases to 3.3% in August

Romualdez believes coordination between the executive and legislative branches will be crucial to decreasing inflation rates further.

“Managing inflation is a see-saw battle. The challenge for us is to keep it falling, or at least steady. And with the executive and legislative branches and of course, the private sector working together, I hope we succeed for the benefit of our people,” he noted.

Better days ahead

Albay 2nd District Rep. Joey Salceda, meanwhile, believes that indicators point towards a downward inflation trend since prices of food products have decreased.

“Today’s inflation report was much needed breathing room. The inflation rate was largely driven by rice and corn prices, which were higher year-on-year, due to base effects. But if you look at month-on-month figures, rice and corn are actually cheaper now than they were last month. So, the trend is actually even better for consumers in that perspective,” Salceda said.

“As a result of that slightly favorable trend, month-on-month inflation for meat has also been negative, while the impact of feed prices on year-on-year meat prices has been muted.   In fact, looking at the month-on-month price movements, nothing really sticks out. Even sugar is cheaper both on a month-on-month and year-on-year basis,” he added.

According to Salceda, an economist, these numbers would boost consumer confidence, which would eventually help industries earn more.

Still, the lawmaker advised the government to monitor prices of rice and corn, as these two products can easily ramp up inflation numbers.

“We need these numbers moving forward for consumer confidence, especially as the biggest consumer spending event of the year – the Christmas season – dawns. This is often the only chance many firms get to ramp up sales, so it will be very crucial to see whether consumers get some extra legroom for discretionary spending due to lower consumer prices,” Salceda said.

“Moving forward, we need to continue keeping track of momentum for rice and corn prices. Corn remains a very strong sticking point because the transmission to meat prices, especially poultry, can be very quick. If we want to prevent an upward spiral in food prices, we really need to focus on corn,” he noted.

Fuel prices, Salceda said, should also need to be kept in check.

“I am also keeping track of movements in fuel prices, which moved considerably on a month-on-month and year-on-year basis. At 5.9 percent year-on-year inflation and 2.2 percent month-on-month, it’s something to watch out for. There will not be massive changes moving forward, in my view, given that OPEC plans to increase output by October, but this is canceled out by lower US output,” he said.

“All in all, these results are positive. I hope President Marcos and his agriculture and food security team, led by the Secretary of Agriculture, will remain hell-bent on ensuring that the price of rice and corn will continue to decline in the coming months – especially after harvest season next month for rice,” he added.