May 16, 2019
RIZAL Commercial Banking Corp. (RCBC) on Wednesday revised downward its inflation projection for this year to 2.9 percent from the earlier 3.0 percent.
In its Report on the Economy and Financial Markets released on Wednesday, RCBC said it revised its projection on account of the expected decline in rice prices.
“Rice prices have gone down sharply in recent months, even before the full effects of the Rice Tariffication law took place,” the bank explained.
The report comes a week after the Philippine Statistics Authority reported that the rate of the increase in the prices of goods and services further eased to 3.0 percent in April from 3.3 percent in March, due to the slower increase in the prices of food and other commodities.
“Prices of other food/agricultural products have also gone down amid the summer harvest season and the recent non-monetary measures by the government since the latter part of 2018,” the report said.
“Once the Rice Tariffication [law] fully takes effect, we estimate inflation to go even lower to [the] 2-percent levels in the coming months of 2019,” it added.
Signed in February, this law — officially known as Republic Act 11203 or the Philippine Rice Tariffication Act — replaces the country’s rice-importation quota system with tariffs.
Under the measure, in- and out-quota imports from members of the Association of Southeast Asian Nations (Asean) will be levied a uniform 35-percent duty. A 40-percent tariff will be imposed on shipments from non-Asean members within the minimum access volume of 350,000 MT, rising up to 180 percent for out-quota imports.
RCBC said other factors that would contribute to the inflation downtrend include the stronger peso exchange rate and “slower global economic growth outlook, especially in developed countries that also fundamentally lead to lower global, as well as local, inflationary pressures.”
For next year, RCBC forecasts inflation to settle at 3.1 percent, slightly hugher than the previous 3.0 percent.
Credit belongs to : www.manilatimes.net