House credits government interventions for slowing inflation

The continued slowdown of headline inflation to 1.4 percent in April can be attributed to various strategic approaches being undertaken by the government, particularly the persistent efforts to deflate, if not stabilize, the prices of rice, House Speaker Martin Romualdez said on Tuesday.

Last month’s inflation dropped to its lowest level in over five years, the lowest since March 2019 when it stood at 1.2 percent.

Data from the Philippine Statistics Authority (PSA) showed that the April inflation, cooling down from 1.8 percent in March, was primarily driven by cheaper prices of food, mainly rice and vegetables, as well as a reduction in transport costs.

The costs of rice — usually the primary driver — were a major contributor to the easing inflation, dropping to -10.9 percent from -7.7 percent in March.

Rice prices have been steadily decreasing since earlier this year, largely influenced by several factors, including the import tariff reduction, food crisis declaration, and government interventions like the Kadiwa program, which sells rice as low as P20 per kilo in selected markets.

The Speaker claimed that this progress was a result of a unified and coordinated effort between President Ferdinand Marcos Jr. and Congress — dominated by his allies — through passing laws and supporting economic measures aimed at driving down the prices of goods and services while sustaining the economy’s growth.

"We have accelerated the entry of cheaper food into the market, opened up opportunities for business and investment, and ensured that small business owners and workers are not left behind in our progress,” Romualdez said.

In December last year, Congress passed a measure amending the Rice Tariffication Law (RTL) — one of the legislative priorities of the President — which was subsequently enacted into law later that same month.

The RTL restricted the NFA's function of buffering the stocking of palay for calamities and abolished the agency's powers to regulate the rice sector, license market players, inspect warehouses, track stock movements, and stabilize prices while liberalizing the importation of rice.

The amended RTL now allows the NFA to use its buffer stocks to supply areas experiencing rice supply shortages and extraordinary price hikes — a condition that falls under a food security emergency, which the Department of Agriculture secretary may declare upon the recommendation of the National Price Coordinating Council and Local Price Coordinating Council.

The DA in February declared a food security emergency to curb the skyrocketing cost of rice, which was then pegged at P60 per kilo.

The declaration allowed the release of buffer stocks at a cheaper price in selected areas, such as P20 per kilo in Cebu, though it was temporarily suspended and will resume after the 12 May elections.

In July last year, Marcos signed Executive Order 62, reducing the tariff on rice imports from 35 percent to 15 percent.

Meanwhile, according to economist-lawmaker Joey Salceda, the low inflation rate will also allow the Bangko Sentral ng Pilipinas to reduce interest rates, which is beneficial for those with housing loans and businesses.

“Overall, this should help shield us from volatilities brought about by unstable tariff policies of the US and the resulting retaliatory tariffs from other countries,” the Albay solon stated.

Moreover, he mentioned that foreign buying has been gaining momentum in anticipation of good inflation figures, and he expects this trend to continue as the Philippines positions itself as resilient to economic shocks, allaying the fear of foreign investors.

The Philippine economy remained one of the fastest-growing economies in Asia, but still lagged behind its neighbors in luring foreign direct investment, owing to various factors, such as strict foreign ownership restrictions and being prone to economic volatility.

Nonetheless, the House leadership pledged that it would continue to assist the President in keeping food prices down and ensuring the inflation rate remains low.