Rice inflation to remain negative in next four months —PSA

GMA Network

2 days ago

The retail price of rice, the country's staple food, is expected to continue its contraction in the next four months due to base effects and continuous arrival of imported grain, the Philippine Statistics Authority said Tuesday.
At a press conference, National Statistician and PSA chief Claire Dennis Mapa said rice saw a sharper year-on-year deflation or 'negative inflation' at -15.9% in July from -14.3% in June.
Mapa said the -15.9% rice inflation was the lowest for the staple since January 1995.
'In the next four months we will still be seeing negative inflation for rice,' the PSA chief said.
The trend of easing inflation for rice seen since August 2024 was consistent with the PSA's expectation that it will begin easing towards the second half of 2024 due to base effects, particularly when it began its uptrend in August 2023, as well as the impact of lower rice import tariff which took effect early July last year.
To illustrate the contraction in rice inflation seen last month, Mapa bared the year-on-year national average prices of regular, well-milled, and special rice varieties during the period.
In particular, the following are the average prices of rice at the national level in July 2025:
Regular milled: P41.31 per kilo from P50.90 per kilo in July 2024
Well-milled: P47.60 per kilo from P55.85 per kilo
Special: P56.83 per kilo from P64.42 per kilo year-on-year
Proposed rice import tariff hike
On the Department of Agriculture's recommendation to increase the tariffs on imported rice from 15% to 25%, Mapa said any increase in tariff would result in 'an increase in the retail price.'
However, he clarified that the PSA is still monitoring the developing situation but said any effect on prices would depend on its timing.
Nevertheless, the PSA chief said the expectation for rice is it would remain at a negative inflation rate for the entire year.
In a separate statement, Agriculture Secretary Francisco Tiu Laurel Jr. said that increasing the rice import tariff could help curb excessive imports while generating much-needed revenue to support programs that boost local farmers' productivity and competitiveness.
'This is a delicate balancing act between our duty to protect rice farmers from those who undervalue their produce and ensuring consumers have access to affordable rice,' said Tiu Laurel.
The DA also recommended a temporary halt in rice importation.
Enacted in 2018 to liberalize rice importation, the Rice Tarrification Law (RTL) empowers the President to halt imports under specific conditions.
Specifically, Section 3, as amended by Republic Act No. 12078 last December, allows the President to suspend or prohibit further importation 'when there is an excessive supply of imported or locally produced rice resulting in an extraordinary decrease in local prices.'
The suspension may apply for a specific period or volume until supply and prices stabilize.
In July 2024, Marcos reduced rice tariffs to 15% to provide relief to consumers amid soaring world prices at that time.
That move, along with other DA initiatives—including the implementation of a maximum suggested retail price for imported 5% broken DT8 rice starting January—helped bring down prices of imported rice from over P60 per kilo to around P43 per kilo.
Globally, bumper harvests—as well as lifting of India's rice export ban, a record-breaking 9.08 million metric tons of palay produced by the Philippines in the first half of the year—have put downward pressure on prices, particularly from exporting countries.
From over $700 per metric ton, Vietnamese rice DT8 variety which is the main type that is now widely favored by the Philippine market now sells for $470 per ton, freight-on-board as of last week, according to the DA.
With cheaper imports flooding the market, Tiu Laurel said reports indicate that some private traders are now buying palay for as low as P8 to P10 per kilo—well below the production cost of P12 to P14 per kilo.
Farmers have attributed this sharp decline to the influx of cheaper imported rice.
Currently, the landed cost of 5% broken imported rice has dropped to about P35 per kilo—or even lower in some cases.
Tiu Laurel said that even if the President adopts the DA's recommendations, the relief would be temporary.
He stressed the need to amend the RTL to give the NFA greater flexibility in releasing its rice stocks and influencing both palay and rice prices.
'When its regulatory powers are restored, the NFA could provide the DA with more precise industry data, including consumption patterns and price trends as well as supply levels per region and province, which are invaluable in crafting more responsive policies,' said Tiu Laurel.
Allowing the NFA to resume selling stocks purchased from local farmers would also free up warehouse space, enabling the agency to procure more palay. According to the secretary, by rule of thumb, producing one sack of rice requires the NFA to procure approximately two sacks of palay.
'Now that we've helped lower inflation, the DA's next challenge is to tackle rice and pork issues to keep food inflation in check,' said Tiu Laurel. —AOL, GMA Integrated News