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Home IBON Foundation Rice inflation highest in 15 years, shows gov’t failing to manage inflation — IBON

Rice inflation highest in 15 years, shows gov’t failing to manage inflation — IBON

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Rice inflation highest in 15 years, shows gov’t failing to manage inflation — IBON

March 5, 2024

by IBON Foundation

Research group IBON said the uptick in February headline inflation, pushed by the rapid increase in rice prices, shows that the Marcos administration’s so-called measures to tame inflation are not working. The group said that the government needs to quit its hype and implement real solutions to high prices. Particularly for the country’s staple, the Marcos government should rescind its rice liberalization law that has only led to higher rice prices, IBON said. The recent rice inflation is the fastest in 15 years.

Faster year-on-year headline inflation was reported at 3.4% in February 2024 from 2.8% in January 2024. This was primarily attributed to faster inflation for food and non-alcoholic beverages (to 4.6% from 3.5%) which was driven up by rice inflation accelerating to 23.7% from 22.6 percent. This is the highest inflation for rice since the 24.6% in February 2009 or 15 years ago.

The group said that the bottom 30% of households are worse off with inflation for them accelerating to 4.2% in February 2024 from 3.6% in January 2024. This was also mainly due to faster inflation for food and non-alcoholic beverages (to 6.4% from 5.2%). Rice inflation was also behind this and much higher for the poorest households, rising to 26.3% from 24.8 percent.

IBON observed that rice prices have only continued to increase since the Rice Tariffication Law was enacted in February 2019, contrary to government claims that the law would usher in cheaper rice. Rice inflation accelerated from 4.5% in February 2019 to 23.7% in February 2024. For the bottom 30% of households, rice inflation accelerated from 4.9% to 26.3 percent. Rice prices soared, with the cost of regular milled rice increasing from Php43/kilo in February 2019 to Php50/kilo in February 2024, and well milled from Php47/kilo to Php56/kilo.

IBON said that the Marcos administration has obviously failed to arrest rising rice and food prices. The group said that more effective measures need to be implemented, such as stopping rice import liberalization, giving substantial support to producers, and increasing the purchasing power of poor households through wage hikes and direct assistance.###