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Removal of rice import quota seen to lower rice prices
By Leslie D. Venzon

MANILA, Dec. 6 (PNA) -- The lifting of quantitative restrictions (QR) on rice imports next year can lower prices of locally grown rice which may bode well for the country’s food inflation.

In a statement, the National Economic and Development Authority (NEDA) said the removal of QR for rice imports by July 2017 is expected to decrease prices of well-milled rice by Php7.00 and farm gate price by Php5.00.

“We must help our rice farmers prepare for this and help them transition to higher value crops as we ensure food security and make basic prices more affordable to the poor,” said NEDA Director-General and Socioeconomic Planning Secretary Ernesto M. Pernia.

This, after food inflation remained unchanged in November 2016 at 3.5 percent, with rice prices breaking its five-month long increasing trend and corn prices continuing in its downward trend since August.

Rice prices account for 38 percent of total food inflation.

“The decrease in rice prices signals the recovery of the rice sector from the devastation of typhoons Karen and Lawin. We must foster technological advances in agriculture to decrease the susceptibility of our crops to natural calamities,” said Pernia.

However, inflation in November 2016 slightly rose to 2.5 percent from 2.3 percent in the previous month due to the increase in the prices of major non-food commodities.

“The increase in inflation can be attributed to the increase in domestic prices of petrol products, which comprise the bulk of the non-food commodity basket usually purchased by the average Filipino household,” added Pernia.

Non-food inflation increased due to the uptick of prices in all major non-food items such as housing, water, electricity, gas and other fuels (1.3 percent from 0.9 percent), and transport (0.5 percent from 0.2 percent).

“Overall we expect the full year inflation for 2016 to be well within the government’s inflation target band of 2 to 4 percent. The overall balance of risks is tilted on the upside, with supply-side factors as the main contributor to price adjustments,” added Pernia.

He explained that international and domestic risks are tilted upward from a possible rally in oil prices, depreciation of the peso against the United States dollar, and pending petitions for electricity rate increases. (PNA)

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