Press Releases

Statement on the March 2024 inflation figures

April 5th, 2024

Rep. Joey Sarte Salceda

As I said last month, once again, it’s all about rice.

Food inflation accounts for some 57 percent of the total inflation this March. Without the abnormal price of rice in the global market, inflation would have been closer to 3.1 percent, which is well within acceptable range.

Corn prices are declining. Fish prices are down. Vegetables are cheaper this year than last year. And even sugar prices are slightly down. Bread prices are mildly up, but that is attributable partly due to the correlated prices of wheat and rice, especially in India where they are substitutes.

The gameplan must be focused on rice.

Secretary Tiu-Laurel has been more aggressive with distributing rice production support this quarter. He has brought machinery distribution, for example, to about 92 percent of target. The P12 billion rice farmer financial assistance is also set to be completed this June – again, just in time for planting.

The DA has also been more active with delivering programs from the Survival and Recovery (SURE) Loan program of the Agricultural Credit Policy Council (ACPC). The Philippine Crop Insurance Corporation has also begun to issue indemnity insurance payments to farmers affected by drought.

There is significant progress being made in the DA, and his governance cleanup of the NFA will also help make cheap rice available to the poor, as well as provide a better market for rice farmers.

Because rice is the greatest driver of overall prices, and rice requires the most irrigation of all major crops, the greatest upside risk to inflation moving forward is El Nino.

In the instances where it is available, we should be able to impound water. Farmers with on-farm reservoir systems tend to endure El Nino better – not to mention providing additional opportunities in fish production. That also makes them less reliant on large-scale irrigation projects, which, while optimal, tend to take years to complete.

PAGASA’s forecasts indicate that this April, rainfall shouldn’t actually be catastrophically below normal.
We will still see some rain – so we should impound that. The worst droughts will be in May, with the hardest-hit regions being Central Luzon and Bicol. But models suggest that El Nino will taper off in June.

Over the long term, we must address the fragility of the country’s food systems. President Marcos has been clocking in very strong rice harvest figures – and recorded the biggest harvest in history in 2023. The path forward with rice is to address pre-harvest costs and post-harvest losses, while making the system more resilient from trade shocks and adverse climate conditions.

Outlook in interest rates

The BSP anticipated an uptick in inflation by 2024 due to the risks of El Nino. There will not be surprise moves on the part of the central bank.

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