By Cai U. Ordinario, September 5, 2023; Business Mirror

Moody’s Analytics expects the country’s inflation rate to average 4.8 percent in August, faster than the actual rate of increase in commodity prices in July.

This is the low end of the Bangko Sentral ng Pilipinas (BSP) forecast of 4.8 to 5.6 percent in August. The higher inflation expectation of the BSP was due in part to the steady climb of rice prices.

The BSP also noted that inflation may be higher in August due to weather disturbances, the sharp rise in fuel prices as well as increased transport costs.

The central bank noted that higher train fares and toll rates, and the peso depreciation are the primary sources of upward price pressures in August.

In July, the Philippine Statistics Authority (PSA) reported that inflation slowed to 4.7 percent, the lowest in 16 months. However, even during the briefing, the PSA already said rice prices have been climbing and could be the cause for high inflation.

PSA data showed rice inflation averaged 4.2 percent in July 2023, the highest since February 2019 when the increase in the commodity’s prices was at 4.5 percent. The Rice Trade Liberalization (RTL) Act was implemented in March 2019.

This may have prompted the President to issue Executive Order No. 39 which mandated a price ceiling of P41 per kilo for regular-milled rice and P45 per kilo of well-milled rice.

In a statement issued after the President set a price ceiling on the country’s staple, Socioeconomic Planning Secretary Arsenio M. Balisacan backed the issuance of EO 39 saying that a temporary ceiling price on rice will give Filipinos a much-needed reprieve in terms of high inflation as well as discourage hoarding.