Higher prices of food items again pushed up the country’s inflation rate to 4.9 percent in August, according to the Philippine Statistics Authority (PSA).
This placed the country’s inflation rate in the January-to-August period to an average of 4.4 percent, near the high end of the government’s 3-percent to 5-percent inflation target for 2014.
The average rate of price hikes in July 2014 was also at 4.9 percent, the highest since November 2011.
Rice had a notable year-on-year increase in prices in August. The country’s food staple recorded an average price increase of 13.2 percent in August.
National Economic and Development Authority (Neda) Director General and Socioeconomic Planning Secretary Arsenio M. Balisacan said the increase in rice prices may continue while the government awaits the arrival of cheap imported rice.
Balisacan said importation is necessary, as the El Niño phenomenon may cause a 1.2-percent decline in the country’s palay production in the second half of 2014.
“Food prices, while expected to remain elevated, are seen to normalize as government steps up its rice importation,” Balisacan said.
“The relatively high probability of El Niño toward the fourth quarter of 2014 implies that the government should intensify efforts to implement programs that will help the areas which are highly and moderately vulnerable to the adverse impact of a dry spell,” he added.
The Neda director general, who was a former official of the Department of Agriculture, said food prices may see a reprieve by mid-September.
This will be spurred by the harvest season for corn, which is another food staple in the Philippines. Yellow corn is also used in the manufacture of animal feeds, while white corn is for human consumption, particularly in the Visayas and Mindanao.
In the meantime, Balisacan said the government should increase pest-control measures that will help in the eradication of cocolisap to help the coconut industry.
Coconut products, the Neda chief said, are used in the production of many food and nonfood manufactures intended for domestic consumption.
PSA data showed that food inflation climbed 8.3 percent in August 2014, resulting from faster year-on-year growth in almost all major food items during the period.
It was the same rate registered in July but was significantly higher than the 1.8 percent posted in August 2013.
“The indices for food and non-alcoholic beverages; clothing and footwear; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance of the house; and health posted higher annual rates while slowdowns were observed in transport and restaurant and miscellaneous goods and services indices,” the PSA said.
Rice inflation rates nationwide were in double-digits. The highest rice prices were found in Metro Manila, where rice inflation was at 14.7 percent. It was lower at 13.1 percent in Areas Outside of the National Capital Region (AONCR). Annual inflation in the NCR was at 4.4 percent in August. It was pegged at 3.9 percent a month ago and -0.1 percent in August 2013.
Annual inflation in AONCR, however, eased to 5 percent in August. Inflation was 5.1 percent last month and 2.7 percent during the same period a year ago.
Excluding select food and energy items, core inflation advanced to 3.4 percent in August. It was 3 percent last month and 1.9 percent during the same month a year ago.