BSP expects no significant rice inflation as buffer remains highByJoann Santiago

MANILA-- A ranking Bangko Sentral ng Pilipinas (BSP) official discounts any significant uptick in inflation on account of rice supply concern, saying there is enough buffer.

In a briefing Friday, BSP Deputy Governor Diwa Guinigundo cited that latest rice inventory, based on the figures of the National Economic Development Authority (NEDA) and the Philippine Statistics Office (NFA), is around 69 days, smaller than the 71 days in the first quarter of 2016 but still sufficient.

He said the more than two months of rice buffer would be augmented by the supply from the second cropping harvest season, which is from February to July.

So we don't believe rice prices will move up in a very significant way, he said during the central bank's briefing on the first quarter 2016 inflation.

Issues on the country's rice importation is currently hot as some sectors raised the need for the NFA to allow the private sector to import rice while some sectors said this job should be done through government-to-government method.

Deadline for rice importation in the country, through the minimum access volume (MAV), was initially set for Feb. 28, 2017 but was extended to March 31, 2017 after some stakeholders called for this, citing that the rice they have imported would not arrive in the country before the deadline.

Guinigundo, who sits as the central bank's representative to the NFA Council, which also include the Cabinet Secretary as its chairperson, the NFA administrator, chairman of the Development Bank of the Philippines, the president of the Land Bank of the Philippines, the secretaries of the Department of Finance (DOF), Department of Trade and Industry (DTI) and the National Economic and Development Authority (NEDA) and a representative of a farmer's group, explained that MAV is our commitment to WTO so we have to allow the importation.

With rice supply remaining sufficient, the central bank official said there was no need to import additional supply for now, noting also that there remained a standby approval to import 250,000 metric tons of rice using the government-to-government method.

The NFA council hasn't activated that precisely because we have sufficient supply at this point, lasting until the end of June. Secondly, we allow the MAV importation, which means we allow the private sector to import, he said.

Guinigundo also dispelled fears that allowing the private sector to import rice will flood the local market which may subsequently bring down prices to the detriment of local farmers.

The likelihood of the private importer to make a mistake in terms of supply and demand is quite remote because it's their money that's at stake, he said, noting that what the private sector will do is to keep their supply in their warehouses and will release this when buffers thin out.

The BSP official said concerns on the rice supply to date was based on the officials' bid to ensure stable supply without further exposing NFA to indebtedness.

The NFA Council is looking very carefully the numbers and is making sure that we don't experience significant increases in rice prices, he added.

Source: Philippines News Agency