The government’s economic managers on Friday vowed to continue working towards further reining in the prices of commodities, even as the country’s inflation rate has already declined to a seven-month low of 5.1 percent in December.
“Nonetheless, we continue to exert all efforts to bring inflation within the government’s target range of 2 to 4 percent, and ensure price stability all year round. While we can say that the worst seems over given the signs of easing price pressures, we continue to be vigilant of possible risks,” they said in a statement.
The National Economic and Development Authority (NEDA), Department of Finance (DOF) and the Department of Budget and Management (DBM) noted that ensuring sufficient supply of rice and other major agricultural products from local sources remains crucial over the near term, especially with the looming El Niño phenomenon this year.
“Short-maturing, high-yielding, and resilient varieties of crops should be utilized, alongside efficient water management systems,” they said.
The economic team said rice prices are projected to decline by as much as PHP7 per kilo with the expected signing into law of the Rice Tariffication Bill this year.
“We recognize, however, that this favorable effect can only be sustained if there are more players in the rice market, starting from production and financing to post harvest and trading,” they added.
The NEDA, DOF and DBM also underscored the need for the Philippine Competition Commission to be vigilant in curbing anti-competitive behavior, particularly in the rice market.
“In the fisheries sector, the government is strengthening its crackdown against illegal fishing. Ten out of the 13 fishing grounds in the Philippines were reportedly over fished. This effort must be accompanied by sustainable coastal resource management to help increase fish production, they said.
The economic team also advised the Department of Agriculture to fast-track the issuance of the Fisheries Administrative Order No. 259 to compensate for the limited supply, as some parts in the Visayas are under closed fishing season.
Further, they said that the government is closely monitoring domestic pump prices to ensure that the new excise tax on oil is not yet reflected in the prices at the start of the year, noting that old fuel inventories are not subjected to the tax increase.
Economic managers noted that the Philippines continues to benefit from the falling prices of international crude oil, resulting in a series of oil price rollbacks for the past two months.
Inflation rate decelerated to 5.1 percent in December 2018, sharply down from November’s 6 percent, mainly softened by slower price increases in food and non-alcoholic beverages and transportation.
“This signifies that the mitigating measures already in force are broadly effective,” they said.
Full-year 2018 inflation averaged at 5.2 percent, which is higher than last year’s 2.9 percent inflation, but within the adjusted inflation forecast of the Development Budget Coordination Committee.