National Economic and Development Authority (NEDA) Pledges Swift Action to Address Rising Inflation and Bolster Food Security

In response to the recent report from the Philippine Statistics Authority indicating a surge in inflation to 5.3 percent in August from 4.7 percent in July 2023, with year-to-date inflation reaching 6.6 percent, the National Economic and Development Authority (NEDA) is committed to reinforcing measures aimed at ensuring food security, protecting consumers, and offering vital assistance to farmers.

NEDA Secretary Arsenio M. Balisacan emphasized that despite ongoing challenges, such as severe weather conditions and trade limitations imposed by other nations, the government’s objective remains steadfast—to achieve an inflation rate between 2 and 4 percent by the year’s end.

Key Inflation Factors:

1. Rice Inflation: Rice inflation rose sharply to 8.7 percent in August from 4.2 percent in July 2023. This increase is attributed to an expected reduction in rice production due to El Niño, an export ban imposed by major rice exporters like India and Myanmar, leading to higher international rice prices. Alleged hoarding incidents, artificial shortages, and speculative business decisions may have contributed to an additional upward pressure on domestic rice prices.
2. Vegetable Inflation: Vegetable inflation increased to 31.9 percent from 21.8 percent, driven by production losses caused by enhanced monsoon rains and Super Typhoon Egay.

Immediate Actions and Recommendations:

1. Comprehensive Assistance to Farmers: NEDA stressed the importance of providing comprehensive assistance to rice and vegetable farmers, considering the adverse effects of continuous rains and the anticipated impact of El Niño in the first quarter of 2024. The Department of Agriculture and the National Food Authority will intensify support for drying and milling palay in the upcoming harvest season.
2. Accelerate Food Stamp Program (FSP) Rollout: The government aims to accelerate the Food Stamp Program rollout, a priority program of the Department of Social Welfare and Development, providing PHP 3,000 worth of food credits per month for six months to target beneficiaries.
3. Support for Small-Scale Rice Retailers: The Sustainable Livelihood Program (SLP) of the Department of Social Welfare and Development will provide PHP 15,000 to small-scale rice retailers affected by Executive Order No. 39. Assistance will be provided for transporting rice sacks from farmer cooperatives and traders to retailers and wholesalers, with additional funding from the Office of the President.
4. Government Support for Consumers: Initiatives such as the continued implementation of Kadiwa stores, targeted cash transfers, and the Department of Trade and Industry’s (DTI) Diskwento Caravan will be maintained.
5. Review of Tariff Levels on Rice: A review of existing tariff levels on rice is recommended to lower the cost for consumers, with considerations for its impact on local producers. A temporary and calibrated reduction in tariffs is proposed to counterbalance the rise in global prices.
6. Three-Year Food Logistics Action Agenda: President Ferdinand R. Marcos Jr. has approved the three-year food logistics action agenda of the DTI. This initiative aims to ensure available, accessible, and affordable food for consumers by upgrading food terminals and developing an efficient logistics system.

Secretary Balisacan expressed confidence in the government’s ability to overcome obstacles by leveraging policy levers on multiple fronts, safeguarding the interests of Filipino consumers and producers.