LESS than a day after President Rodrigo Duterte ordered the suspension of rice imports, Bangko Sentral ng Pilipinas Governor Benjamin Diokno assured on Wednesday that the move would not have any impact on the country’s inflation.
“It will not (affect inflation),” Diokno told reporters.
Latest data show that consumer price growth eased to 0.8 percent in October, which brought the year-to-date average to 2.6 percent, or well within the 2 to 4-percent target range of the government.
The slowdown was traced to the 0-9 percent annual drop registered in the heavily weighted food and non-alcoholic beverages index.
Diokno is confident that the suspension would not affect the country’s rice supply, as the government has enough buffers for the staple.
He also believes that suspending Republic Act 11203, or the “Rice Tariffication Law,” is temporary as the government still has to abide by its provisions.
The President ordered the suspension on Tuesday night in a bid to help farmers affected by the law that took effect in March this year.
This decision came less than a week after Finance Secretary Carlos Dominguez 3rd said the government would continue implementing the law despite calls for its suspension.
“There is no inclination to repeal, revise or suspend the Rice Tariffication Law. We are confident that this is the best means to move our agriculture sector forward and foster competitiveness,” Dominguez said then.
He said this even as he admitted that the implementation of the law had resulted in transition challenges, specifically the drop in the farmgate price of palay (unmilled rice) in certain areas.
Citing Philippine Statistics Authority data, the Finance chief noted that from an average of P17.23 per kilogram (kg) of dry paddy from 2015 to 2017, when prices were normal, prices declined to an average of P15.71/kg from the third week of September to the second week of October. This translates to an average loss for farmers of about P1.52/kg.
In some provinces, farmgate prices fell by as much as P5.63/kg while in others, palay prices actually rose by P3.75/kg, he added.