Prices still higher now than since start of Duterte admin

July 6, 2019

by IBON Foundation

Research group IBON said that while June inflation has slowed, the prices of basic food items are still higher, especially when compared to prices at the start of the Duterte administration. The wages and incomes of many Filipinos are unable to keep up with the high prices. The group said that food prices will continue to increase as long as government neglects Philippine agriculture and the country becomes further dependent on imports.

The Philippine Statistics Authority (PSA) reported that nationwide inflation slowed to 2.7% in June 2019 from 3.2% the previous month. Inflation in the National Capital Region (NCR) eased to 3.0% from 3.4%, and inflation in areas outside of NCR fell to 2.6% from 3.1%, during the same period.

IBON executive director Sonny Africa said however that this lower inflation is not being felt by the public. He said that food is still generally more expensive than in the same time last year, and especially compared to July 2016 at the start of the Duterte administration.

For instance, in Metro Manila, between the first week of July 2018 and the same period in July 2019, rice is slightly cheaper but fish, chicken and many vegetables are much more expensive, Africa said. According to the PSA, the prevailing retail price of commercial well milled rice in the first week of July 2019 was Php44 per kilogram (/kg), which is only one peso cheaper than the Php45/kg in the first week of July 2018. The cost of fish like bangus and tilapia meanwhile was much higher, increasing by Php10 and Php20, respectively. Retail prices for whole chicken, carrots, and potatoes also rose by Php10, Php40, and Php20.

Africa said that NCR food prices are much more expensive now compared to prices during the first week of July 2016, at the start of the Duterte government. Commercial well milled rice is higher by Php4.00/kg; bangus by Php20; tilapia by Php10; galunggong by Php20; whole chicken by Php20; ampalaya by Php20; carrots by Php30; habitchuelas by Php20; tomato by Php30; potato by Php10; and eggplant by Php20.

But the wages and incomes of ordinary Filipinos are not enough to cope with these higher prices, he said. IBON estimates that the family living wage (FLW) needed to meet basic needs is PHP1,008 for a family of five and Php1,210 for a family of six in the NCR as of June 2019. But the NCR nominal minimum wage of Php537 is not enough with wage gaps of Php471 and Php673, respectively.

Africa said that food prices will keep rising and be unnecessarily expensive as long as government continues to neglect the country’s agriculture sector. He noted that the budget for agriculture continues to shrink, with the Department of Agriculture (DA) budget cut by Php3.4 billion in 2019 and of the National Irrigation Administration (NIA) by about Php5.6 billion.

The country’s increasing dependence on food imports because of policies like the Rice Tariffication Law will only worsen the country’s agriculture crisis, Africa said. Rice liberalization will not necessarily ensure a cheap and stable supply of rice while harming the livelihoods and incomes of Filipino rice farmers. Increased rice imports may have been behind the falling farmgate price of palay which significantly dropped from Php21.36/kg last year to Php17.91 this year. Rather than rely on rice imports, domestic rice production should be made more efficient and productive to make this cheaper, said Africa.

Africa said that lowering food prices through more developed domestic agriculture is essential for lower inflation. He also said that low inflation will be more meaningful for the public if they have higher incomes to begin with. The government can give relief to Filipino families struggling with high food prices not just by continuing to provide affordable NFA rice but also by substantially increasing wages and salaries. ###