Inflation to go down in days ahead – House leaders

By Filane Mikee Cervantes and Zaldy De Layola

October 5, 2023, 2:23 pm Updated on October 5, 2023, 4:07 pm

<p><em>(File photo)</em></p>

(File photo)

MANILA – House Senior Deputy Speaker Aurelio Gonzales Jr. and Committee on Agriculture and Food chairperson Mark Enverga on Thursday both expressed optimism that inflation had peaked in September and will soon decline as government initiatives begin to bear results.

In a statement, Enverga attributed this positive outlook to the upcoming harvest season and the transformative agricultural initiatives implemented by President Ferdinand R. Marcos Jr., who also serves as the Agriculture Secretary.

"We believe that inflation has peaked, and we expect it to be on a downward trend because of the forthcoming harvest season. As the earth yields its bounty, we anticipate a steady decline in inflation rates," the 1st District Representative of Quezon said.

The lawmaker emphasized the vital role the harvest season historically plays in stabilizing prices and alleviating economic pressures on the public, as well as the decline in prices of essential agricultural products, including sugar, as a result of strategic reforms in the agricultural sector.

“Addressing the inflationary pressures on items like sugar is crucial to easing the burden on Filipino households. The measures taken to stabilize prices have proven effective, providing much-needed relief to our constituents," he said.

Enverga also lauded the President’s decisive actions in the agriculture sector, underscoring their importance in addressing deep-rooted problems that have persisted for decades due to neglect by past administrations.

"The President's commitment to revitalizing agriculture and rectifying past deficiencies is undeniable. By investing in infrastructure, technology, and sustainable farming practices, we are not only improving the livelihoods of our farmers but also fortifying the foundation of our economy," he said.

Gonzales agreed with Enverga, as he noted that consumer prices rose primarily due to increases in the prices of rice and oil products.

“The administration is trying to help the poor and transportation sectors that are greatly affected by high fuel, power and consumer prices by extending financial assistance through the appropriate state agencies like the Department of Social Welfare and Development and the Department of Transportation,” the lawmaker from Pampanga’s 3rd District said in a separate statement.

“President Marcos is doing his best to fix the complex problems of the agriculture sector. And Congress has been helping him by passing the needed legislative measures like the law condoning the debt of more than one million farmers so they can produce more rice and other products. But putting the house in order will take time. Let us be patient for the results,” he said.

According to the Philippine Statistics Authority, inflation in September 2023 rose to 6.1 percent, up from 5.3 percent in August, bringing year-to-date inflation to 6.6 percent.

This increase is primarily attributed to higher food prices, which surged to 10 percent from 8.2 percent in August. Key contributors include rice (17.9 percent from 8.7 percent), meat (1.3 percent from -0.1 percent), fruits (11.6 percent from 9.6 percent), and corn (1.6 percent from 0.9 percent).

In contrast, the prices of sugar, fish, vegetables, eggs and dairy products, and bread and cereals experienced slower inflation.

‘Snapshot in time past’

House Ways and Means Committee chair Joey Salceda attributed the inflation rate of 6.1 percent in September to oil and rice price shocks that month.

He said the PSA collected data on the first five days of the month, as well as the 15th to 17th days of the month, thus it captured most of the speculative rise in global oil prices but not the sharp declines that followed Sept. 27.

“So, this is a snapshot in time past, and we have to analyze it in that light. The weeks after data collected were entirely better, and we’ll catch that next month,” Salceda said. “In other words, this is probably the worst inflation rate we will record for the -ber months, and it gets better from here.”

He said rice prices went up 17.9 percent year on year in September, but world prices of rice also sharply declined on Sept. 27, and are "now at their August lows.”

“So, the September figures also do not capture the sudden decline in world prices," he said.

Salceda also noted that the President has already lifted the rice price cap under Executive Order 39, as both global and local conditions have since "become more manageable.”

“In short, things have gotten better, and the data didn’t capture it yet because the methodology covers the first half of the month. Expect it captured in the October figures," he said.

He also highlighted the sharp decline in the sugar inflation rate, as the milling season began in September.

“Sugar inflation is back in the single digits, most likely due to the start of the milling season. I expect better prices in the October and November inflation figures, as the milling also peaks during that period," Salceda said.

He said he is "pleased' with the corn and meat figures as both products are down to 1.6 percent inflation.

"As I frequently emphasize, we have a future in these areas. Maybe even better prospects, long-term, than the rice industry. Combined, it’s a bigger share of the economy anyway," he said.

Despite having optimistic predictions for the inflation rate in October and beyond, Salceda emphasized the need to mitigate risks.

“Food prices still need to be watched out for, especially because the 'ber' months typically tend to be bonus season, which is naturally inflationary," he said. “With sufficient food, we can manage the inflationary impacts of sudden injections of income among employees.”

As for rice, there is no alternative to producing more rice per hectare, he said, adding that it is still at "very improvable" levels.

He said the DA under Marcos has already produced a bumper crop early this year. (With a report from Filane Mikee Cervantes/PNA)