The National Economic and Development Authority (NEDA) assured the public on Tuesday that the government is implementing crucial interventions to support the most vulnerable sectors and ensure food security amid the ongoing La Niña phenomenon and higher inflation recorded in July 2024.
The Philippine Statistics Authority (PSA) reported that the country’s inflation rate accelerated to 4.4 percent in July, up from 3.7 percent in June.
The increase brings the year-to-date average inflation to 3.7 percent from January to July 2024. The rise in inflation was driven by higher prices in both food and non-food items, notably housing, utilities, fuel, meat, corn, and fruits.
“The government is relentlessly working to address our nation’s most pressing concern of ensuring food security for every Filipino amid the faster rise in prices in July and the expected typhoons and rains due to the onset of La Niña this August,” NEDA Secretary Arsenio M. Balisacan stated. He added that the weather phenomenon is expected to persist until the first quarter of 2025.
Food and Non-Food Inflation
According to the PSA, food inflation rose to 6.7 percent in July 2024 from 6.5 percent in June 2024. The increase was attributed to higher inflation rates for meat (4.8% from 3.1%), corn (17.5% from 13.1%), fruits (8.4% from 5.6%), eggs and other dairy products (1.8% from 1.3%), and ready-made food products (6.0% from 5.9%). Meanwhile, fish (-0.8% from -1.4%) and sugar (-3.4% from -3.0%) recorded softer deflation.
Transportation inflation registered 3.6 percent in July 2024, up from 3.1 percent in June. This was driven by increasing global petroleum prices due to unexpected large withdrawals of United States gasoline stocks, optimistic fuel demand forecasts, and ongoing geopolitical tensions in the Middle East.
Housing and utilities inflation also climbed (2.3% from 0.1%), while electricity (-5.4% from -13.7%) recorded slower deflation. This change is attributed to the rise in international contract prices of liquefied petroleum gas (LPG) and the increase of Meralco rates in July. The Wholesale Electricity Spot Market charges normalized after the Energy Regulatory Commission ordered a staggered collection of May generation costs.
Government Interventions
To mitigate the impact of high rice prices, the Department of Agriculture (DA) launched the Rice-for-All Program on August 1. Under the program, rice will be sold at P45 per kilo at selected KADIWA centers, with prices adjusted according to fluctuations in rice prices.
In preparation for La Niña, DA assured the availability of quick response funds, assistance, credit, and seed buffer stock. The agency has also expedited the declogging of farm drainage systems and the construction of water-impounding projects and post-harvest facilities.
To assist farmers with higher fuel prices, DA will provide around P510 million in fuel subsidies to crop, livestock, and poultry farmers. It is anticipated that around 160,000 farmers will benefit from over PHP3,000 in fuel assistance between August and September 2024.
Addressing Poverty and Economic Development
“Between 2023 and 2021, about 2.5 million Filipinos were lifted out of poverty, bringing our country’s poverty incidence down to 15.5 percent from 18.1 percent. Our goal now is to sustain this momentum by addressing the constraints to food security and economic development more broadly,” Secretary Balisacan said.
“We emphasize that the country’s economic gains are intended to benefit all Filipinos. The government’s economic policies aim to alleviate poverty by ensuring that all Filipinos can afford their basic needs and achieve a decent standard of living toward a matatag, maginhawa, at panatag na buhay para sa lahat,” he added.
BSP’s Outlook
The Bangko Sentral ng Pilipinas (BSP) noted that the July 2024 inflation of 4.4 percent is within its forecast range of 4.0 to 4.8 percent.
The BSP said inflation is expected to temporarily settle above the target range in July 2024 due to higher electricity rates and positive base effects but will likely follow a general downtrend beginning in August 2024.
The Monetary Board will consider the latest inflation outturn and Q2 2024 national accounts in its assessment of the inflation outlook and the balance of risks in the August 2024 monetary policy meeting.
Moving forward, the BSP said it will ensure that monetary policy settings remain in line with its primary mandate to safeguard price stability conducive to sustainable economic growth.
