Sen. Francis “Kiko” Pangilinan pressed Bangko Sentral ng Pilipinas Gov. Eli Remolona Jr. on measures to bring down food prices and boost agricultural productivity during a Development Budget Coordination Committee (DBCC) briefing on the proposed 2027 National Expenditure Program (NEP) on Thursday, Aug. 27.
Pangilinan said food inflation remains a major driver of nationwide inflation, particularly rice inflation, and asked Remolona whether addressing rice prices should be an immediate government priority.
“Now the challenge is, how do you bring down food prices?” Pangilinan said.
Pangilinan cited his experience as food security secretary, recalling that rice inflation fell from 15% in June 2014 to 0.8% a year later. He also said the country recorded its lowest inflation rate in two decades by September 2015.
Remolona agreed that food prices play a significant role in inflation, noting that food accounts for 37% of the consumer price index. He said food makes up about half of the consumption basket of the poorest 30% of households.
The BSP governor also described rice as a “salient price” because consumers closely monitor its movements, with changes in rice prices affecting inflation expectations.
Remolona said the government should focus on increasing agricultural productivity and rice production rather than imposing price caps.
“It would be better to increase the productivity of our agriculture so that we can increase our rice production,” Remolona said.
Pangilinan, meanwhile, pointed to the Philippines’ relatively low agricultural exports compared with neighboring countries, saying the country remains a net importer of agricultural products.
He said the Philippines exports about $9 billion worth of agricultural products, compared with more than $60 billion each for Thailand and Indonesia.
Pangilinan argued that low agricultural productivity and supply contribute to higher food prices, which in turn drive nationwide inflation.
He said addressing food inflation would require the executive branch, particularly the Department of Agriculture (DA) and the Department of Economy, Planning and Development (DEPDev), to improve supply and productivity.
Pangilinan then asked Remolona whether providing adequate supply to address food inflation would help bring down nationwide inflation.
“Absolutely,” Remolona said.
