The government's decision to import rice in advance will help ease pressure of prices on the domestic economy as well as in the faster rise of inflation.

Department of Agriculture Secretary Arthur Yap earlier said they planned to import the country's 2010 rice requirements as early as possible to avert any supply shortage as a result of the recent calamities that hit among others rice-producing areas in the country, a government press release said.

He, however, declined to say how much rice would be imported and when it would be done citing that this would push prices up.

State-owned National Food Authority earlier said it maintained about 1.25 million tons of rice in its warehouses, which were enough for 35 days of consumption.

The government has so far imported 1.775 million tons of milled rice, lower than year-ago's 2.3 million tons. It sourced the bulk of rice import from Vietnam .

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said that the central bank expected inflation this year to be slightly faster than earlier projected due to factors like the continued increase in international oil prices as well as the global economic recovery, the press release said.

The figure, however, would not go beyond the target for this year and next year.

The government has projected inflation to hover between 2.5 and 4.5 percent this year and between 3.5 and 5.5 percent next year.

Monetary officials sees inflation rate to average at 3.03 percent for this year, up from three percent a year ago, and 3.4 percent next year from 3.3 percent.

Amid the slight increase in the average inflation projection for this year and next year, Tetangco said the policy-making Monetary Board still had the “flexibility to maintain the rates.”

“There may be some slight upward adjustment in inflation forecast for 2009 and 2010, but because of substantial headroom, we don't see immediate risk to breach the target,” he said in the press release.

Tetangco said that the rate of price increases in the domestic economy “is still very moderate” even after the September rate already reached 0.7 percent from the previous month's 0.1 percent due to oil price hikes and the diminishing base effects of year-ago's high inflation rate.

“While there is possible slight (uptick), inflation situation remains manageable,” he said.

MB will again hold its rate setting meeting this month to maintain the record-low four percent for the overnight borrowing rate and the overnight lending rate at six percent.

It kept the central bank rates for the second consecutive time this year last Oct. 1 after cutting a total of 200 basis points off the rate since December 2008 on account of the continued drop in inflation, the press release added.*

back to top