Press Release

Finance Secretary Ralph G. Recto has underscored that the latest inflation rate of 3.4% for February falls within the government’s target band of 2% to 4%, further noting that the government is proactively preparing to mitigate the effects of El Niño on inflation, which is forecasted to peak this month and persist until May.

“The government has a comprehensive plan in place––the Reduce Emerging Inflation Now or REIN––to keep the prices of goods and services stable and affordable. The deliberate implementation of REIN will help us keep the inflation rate within manageable levels, especially with the looming threat of El Niño,” the Finance Chief said.

“As I have said before, reducing inflation and protecting the purchasing power of Filipinos is a top priority of this administration. The government and the Bangko Sentral ng Pilipinas [BSP] are working in sync to ensure that both non-monetary and monetary measures prioritize growth and price stability,” he added.

Inflation is the rate at which the overall prices of goods and services have increased over time.

The inflation rate in February 2024 saw a modest uptick to 3.4% from 2.8% in January, within the BSP’s forecast of 2.8% to 3.6% for the month. This brings the year-to-date (YTD) inflation rate to 3.1%.

The main contributors to February 2024 inflation were food and non-alcoholic beverages (1.7 percentage points (ppt) of the 3.4% overall inflation), restaurants and accommodation services(0.5 ppt), and housing rentals (0.4 ppt).

Food and non-alcoholic beverages inflation slightly rose to 4.6% in February from 3.5% in the previous month mainly due to rice (2.1 ppts contribution) as well as flour, bread, and other bakery products (0.2 ppt). Meanwhile, prices of vegetables (-0.3 ppt) decelerated in February.

The increase in rice inflation in February at 23.7% year-on-year (YoY) is mainly due to higher rice prices domestically and internationally. 

Factors such as El Niño have impacted major rice-exporting countries like Thailand and importers alike have created supply-demand imbalances. Additionally, export curbs in India, the largest rice exporter, contributed to a surge in international rice prices.

Meanwhile, non-food inflation registered a slight uptick at 2.4% in February 2024, from 2.0% in the previous month. The main contributors were restaurants and accommodation services (0.5 ppt), housing rentals (0.4 ppt), and personal care (0.2 ppt). 

Nevertheless, these were offset by the continued deceleration of electricity, gas, and other fuels (4.3% from 4.7% in January 2024) as well as the operation of personal transport equipment (-1.5% from 6.5%). 

Government strategies to ensure food security amid the looming threat of El Niño

The DOF is closely monitoring the vigorous implementation of strategies under its REIN plan to mitigate the potential effects of El Niño on food security. 

Among these is prioritizing the expeditious execution of the 2024 national budget to enable the timely implementation of measures aimed at enhancing agricultural production.

The Department of Budget and Management (DBM) has already approved the release of PHP 455.59 million for the Rice Competitiveness Enhancement Fund (RCEF) for the first quarter of 2024 to fund programs focusing on farm productivity and food security.

The government will also continue the distribution of Fertilizer Discount Vouchers (FDVs) as measures to sustain crop production amidst El Niño. 

Additionally, the government continues to explore more rice trade agreements to ensure a stable supply of rice. Apart from ongoing rice trade deals with India and Vietnam, the government is in talks with Cambodia. 

The government is likewise accelerating the implementation of the El Niño Mitigation and Adaptation Plan and responses to address the impact of typhoons.

It also ensures timely and sufficient imports of key commodities based on more frequent analysis of demand and supply conditions while combating anti-competitive practices.

Moreover, the government will soon release the guidelines for the implementation of the toll rate hike exemption for trucks catering to agricultural goods.

The government likewise continues to implement broad-based interventions to moderate non-food inflation such as providing fuel subsidies for the transport sector and ensuring a stable electricity supply, among other measures.###