NEDA warns of higher rice prices amid tightening supply

The National Economic and Development Authority (NEDA) said the Philippines should be well-positioned against upward potential price pressures that may emanate from the tightening supply of rice from major markets such as Thailand and Vietnam.

“While we expect that the rice supply in the country will remain sufficient, we need to ensure that the country will have enough buffer stock of rice as Thailand and Vietnam cut down their exports,” Economic Planning Secretary and NEDA Director-General Ernesto Pernia said in a statement.

Pernia said the government should provide immediate support and assistance to local farmers that were negatively affected by the enhanced community quarantine.

“We need to fast-track the disbursement of the Rice Competitiveness Enhancement Fund to improve the country’s agricultural productivity and food security in the long term," he said.

He also stressed the need to intensify biosecurity and quarantine measures to control the spread and eradicate the presence of the African Swine Fever in the country.

“The presence of these animal-borne diseases in the country calls for a more effective implementation of the prevention and protection programs as well as heightened monitoring of possible resurgence of other infectious diseases,” he said.

The Inter-agency Task Force Technical Working Group for Anticipatory and Forward Planning, chaired by NEDA, has conducted surveys for business owners, consumers and agriculture and fisheries sector. 

A public consultation on the “new normal” has also been opened. A report of the group will serve as blueprint for a whole-of-government-cum-private sector effort for the country's rapid recovery.

Data from the Philippine Statistics Authority showed that inflation decelerated for the second month to 2.5 percent in March 2020, from 2.6 percent in February 2020 and 3.3 percent in March 2019. This was also within the government’s target of range of 2 percent to 4 percent percent this year.

NEDA said the government should be proactive in addressing supply bottlenecks and implementing price control measures on necessities following the spread of Covid-19

The slower inflation was largely due to the substantial decline in the price index of operation of personal transport equipment and continued deflation in electricity, gas and other fuels.

Pernia said it is important for the government to implement seamless delivery of necessities and strict enforcement of price control measures. These are needed to avoid possible profiteering of unscrupulous traders and retailers.

“We need to provide post-harvest facilities and logistic support, in close coordination with the local government. Initial field reports show that supply, particularly of agricultural commodities, is adequate but suppliers are having problems getting their produce to the market,  to help affected essential industries produce and deliver their goods and services to the market,” he said.

The Department of Agriculture and some local government units have started buying the produce directly from the farmers and distributing these through Kadiwa outlets or mobile palengke.

Meanwhile, NEDA said the government should prioritize support for the production of essential goods and personal protective equipment in the country’s fight against the coronavirus disease 2019.

The Philippine Statistics Authority said in its Monthly Integrated Survey of Selected Industries (MISSI) that the total manufacturing index moderately improved in February 2020.

The volume of production index rose 3 percent, an improvement from a 9.3-percent decline last year, while the value of production index declined 1.8 percent, also an improvement from the 6.2-percent drop recorded in February 2019.

“For March, we expect that the Enhanced Community Quarantine has weighed heavily on the domestic demand on manufacturing products.  Strategies to help the manufacturing establishments affected by the outbreak have to be put in place,” Economic Planning Secretary Ernesto Pernia said.

NEDA expects that manufactured goods that will likely increase in production in the coming months are food, beverages, chemical products and health-related manufactures.

“We need a regular review of rules or limitations imposed due to the health crisis. It is crucial to avoid delimiting production and distribution capacity. This is to ensure that there is enough supply of food and other essentials since these are vital for the communities affected by COVID-19,” Pernia said.

Pernia said that identifying sources of supply of raw materials and ensuring that the supply and distribution chain remain unhampered are key elements to ensure sustained production and distribution of essential goods and services.

“We also expect that the global supply chain disruptions brought by the pandemic will have a negative effect on the manufacturing and merchandise exports,” Pernia said.

The impact of COVID-19 on other countries is also expected to be felt in the Philippines via tourism, aviation, trade and overseas Filipino workers’ remittances.

“The economy should be able to quickly adapt to and thrive under the new normal. Utilizing digital platforms is crucial in optimizing production and distribution of goods and services. Business continuity plans must also be formulated, particularly for the most vulnerable micro, small and medium enterprises,” Pernia said.

To help the various sectors adjust to the “new normal,” the Inter-agency Task Force Technical Working Group for Anticipatory and Forward Planning, chaired by NEDA, is discussing recommendations and possible interventions.

The group has conducted surveys for business owners, consumers, and agriculture and fisheries sector. A public consultation on the “new normal” has also been opened.

Topics: rice , prices , inflation , supply
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