September 10th, 2024
Rep. Joey Sarte Salceda
Today’s inflation report was much needed breathing room. The inflation rate was largely driven by rice and corn prices, which were higher year-on-year, due to base effects. But if you look at month-on-month figures, rice and corn are actually cheaper now than they were last month. So, the trend is actually even better for consumers in that perspective.
As a result of that slightly favorable trend, month-on-month inflation for meat have also been negative, while the impact of feed prices on year-on-year meat prices has been muted.
In fact, looking at the month-on-month price movements, nothing really sticks out. Even sugar is cheaper both on a month-on-month and year-on-year basis.
We need these numbers moving forward for consumer confidence, especially as the biggest consumer spending event of the year – the Christmas season – dawns. This is often the only chance many firms get to ramp up sales, so it will be very crucial to see whether consumers get some extra leg room for discretionary spending due to lower consumer prices.
Moving forward, we need to continue keeping track of momentum for rice and corn prices. Corn remains a very strong sticking point because the transmission to meat prices, especially poultry, can be very quick. If we want to prevent an upward spiral in food prices, we really need to focus on corn.
I am also keeping track of movements in fuel prices, which moved considerably on a month-on-month and year-on-year basis. At 5.9 percent year-on-year inflation and 2.2 percent month-on-month, it’s something to watch out for. There will not be massive changes moving forward, in my view, given that OPEC plans to increase output by October, but this is cancelled out by lower US output.
All in all, these results are positive. I hope President Marcos and his agriculture and food security team, led by the Secretary of Agriculture, will remain hell-bent on ensuring that the price of rice and corn will continue to decline in the coming months – especially after harvest season next month for rice.