Retail prices of rice continued to increase despite the slight reduction in wholesale prices in the last three weeks of September, thus leading to the further acceleration of the inflation rate.
Based on the end-September data of the Philippine Statistics Authority, wholesale rice prices started to decline in the latter part of September, but the reduction has not yet been reflected in the retail market.
The average wholesale price of regular-milled and well-milled rice declined by 11 centavos and 25 centavos a kilo, respectively, from early September.
However, retail prices still rose by 29 centavos and 23 centavos, respectively.
Compared to last year, average retail prices of both varieties increased by P7 and P8.03 a kilo, respectively.
Finance Secretary Carlos Dominguez III recently pointed out that the country’s stubbornly high inflation rate—now at 6.7 percent —was mainly caused by elevated prices of basic food items, especially rice.
PSA data showed that rice was the No. 1 contributor to inflation in September 2018, while food items in the consumption basket accounted for more than half of the inflation rate in the same month.
According to the National Economic and Development Authority, rice makes up about 10 percent of a Filipino’s total consumer index, with about 93 percent of the population eating the grain every day.
The Duterte administration has been scrambling to tame soaring prices of food in the market by imposing a suggested retail price on rice, fish, and vegetables, along with easing importation rules to make way for cheaper food products.
Economic managers said liberalizing rice imports would lower the retail price of rice by P2 to P7 per kilo, and reduce inflation rate by 0.4 percentage point.
Industry groups and Agriculture Secretary Emmanuel Piñol have noted that another contributor to rising prices is the flawed market value chain in the country, which makes way for traders and profiteers to lord over the market.