MANILA -- A committed effort from agencies in the agriculture sector to boost output and introduce policy reform is needed to bring down prices of agricultural products, the National Economic and Development Authority said in a statement on Wednesday.
The Philippine Statistics Authority (PSA) reported that overall price levels spiked by 6.4 percent year-on-year in August 2018, a pace significantly faster than July’s 5.7 percent and the 2.6 percent in August 2017.
“The government, particularly the Department of Agriculture, must act quickly and fervently with a sound judgment to ease the increasing prices of agricultural commodities which are the main drivers of inflation,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
Price adjustments on food and non-alcoholic beverages jumped to 8.5 percent from its 2.9 percent inflation from a year ago. The August food inflation is also higher than the 7.1 percent in July 2018.
Non-food inflation rate was at 4.1 percent, slightly decelerating from the preceding month’s 4.2 percent, but was almost twice the rate during the same month last year at 2.3 percent.
The marginal deceleration in the price indices of housing, water, electricity, gas, and other fuels; and communication, as well as the drop in the price index of education, partially offset the increase in headline inflation.
“While the government’s economic team expected inflation to peak in the third quarter before tapering off towards the latter part of the year, inflation in August is largely beyond the median market forecast. That is why we remain steadfast in putting forward measures that will address prices, especially for food,” Pernia said.
Damage to agriculture brought about by southwest monsoon and Typhoon Karding in Ilocos, Cagayan, and Cordillera regions amounted to PHP33.5 million, taking a toll on the prices of agricultural commodities.
"The rehabilitation of the disaster-stricken agriculture areas must be highly prioritized,” Pernia said.
On rice production, palay production growth slowed down to 1.68 percent from 12.06 percent during the first half of 2017.
Also, the total rice stocks inventory of the National Food Authority (NFA) further declined to 1.9 million metric tons (MT) as of August 10, 2018. This was around 15 percent lower than the levels in the previous month.
“The NFA should fast-track the distribution of remaining inventories, alongside the completion of the government’s 250 thousand MT rice imports from Thailand and Vietnam in the last week of August to build its rice inventory, a necessary step to temper inflation,” Pernia said.
He also cited the weak performance of the fisheries sector with output of fisheries and other crops falling by 2.14 percent and 0.44 percent in the first half of 2018. This was mainly caused by reduced trips of fishermen, fish kill, and destruction of fish cages, aside from weather disturbances.
“A comprehensive and strategic trade policy in place is more important now than ever. Importation of agricultural products to boost supply at the domestic level must be coordinated and harmonized with the local stock inventory and production,” Pernia said.
He reiterated the passage of the amendments to Republic Act 8178 or the Agricultural Tariffication Act, which is a crucial step in reforming the agriculture sector over the medium and long term.
This proposed bill, once signed into law and fully implemented, is expected to help bring down the prices of rice and provide farmers better access to farming technologies and high-yielding variety crops.
In the fisheries sector, Pernia said good quality fingerlings in the aquaculture should be utilized, especially for milkfish (bangus), following reports of high mortality rates of fingerlings. This should be coupled with tighter monitoring of the closed fishing season in the Visayas to allow fish species to spawn and replenish its population.
He added there is also a need to review, and possibly amend, the Fisheries Code and other policies governing the sector. (NEDA PR)
