HEADLINE INFLATION is unlikely to accelerate in April amid the harvest season, although risks from the El Niño dry spell remain, a National Economic and Development Authority (NEDA) official said on Monday.
“We’re hoping that it (inflation) will be good because we’re already harvesting,” NEDA Undersecretary Rosemarie G. Edillon told reporters on the sidelines of a forum.
The dry harvest season for rice started last month and will last until end-April.
Inflation accelerated for the second straight month in March to 3.7%, as prices of food products continued to rise. In particular, rice inflation quickened to 24.4% in March, the highest since 24.6% in February 2009.
The statistics agency will release April inflation data on May 7.
“Of course, we are concerned that many areas are still experiencing this intense heat, but with respect to our farming sector, a lot of them were able to do advance planting,” Ms. Edillon said in mixed English and Filipino.
Agricultural output is being affected by the dry spell and drought caused by El Niño. Latest data from the Agriculture department showed that agricultural damage due to El Niño has reached P3.94 billion, with rice accounting for more than half of the total damage.
While the dry spell is a “concern,” Ms. Edillon said the harvest would still be enough to meet the country’s demand.
The El Niño dry spell would likely persist until May, but the Philippines would still feel its impact until August, the Department of Science and Technology said last month.
Meanwhile, the NEDA is cool to a proposal to remove the minimum access volume (MAV) system.
“The MAV is actually a WTO (World Trade Organization) commitment, and yes, we can actually move towards removing it, but that might reduce our flexibility later on if we need to reimpose it, and this would be anti-WTO,” Ms. Edillon said. “So, we can adjust as necessary.”
Monetary Board Member V. Bruce J. Tolentino earlier proposed the removal of the MAV system, saying the allocation process is vulnerable to corruption.
The MAV allows trading partners guaranteed market access subject to volume quotas. It is a feature of the WTO trading system.
“The fundamental rationale underlying the MAV is the global commitment to more open and less restrictive trade. So, by adopting a lower and more uniform tariff structure plus eliminating the MAV system, we are fulfilling our WTO commitment,” Mr. Tolentino said in a Viber message.
The reimposition of MAV is “backtracking on our overall goal of trade opening coupled with enhanced food security and farm competitiveness,” he added.
In December, the government extended the lowered tariff regime on pork, rice and corn until end-December through Executive Order (EO) No. 50.
EO 50 kept tariff rates for corn at 5% for shipments within the quota and 15% for those exceeding it, while pork was kept at 15% for in-quota and 25% for out-of-quota shipments. The tariff on rice stands at 35%, re-gardless of its country of origin. — Beatriz Marie D. Cruz