Rice prices are expected to be on a downward trend by September, according to Finance Secretary Ralph Recto.
Recto also said key policy rate, currently at a 17-year high of 6.5 percent , could be reduced by as much as 150 basis points in the next two years on the back of an improving outlook for inflation.
“We expect rice prices to go down by 20 percent, maybe by September. This would entail one, increasing production, and second, reducing tariffs,” Finance Secretary Ralph Recto said during the Philippine Economic Briefing held in Manila yesterday.
National Economic and Development Authority Secretary Arsenio Balisacan, for his part, said the domestic prices simply reflect the trends in global prices, particularly for rice.
“The forecast on global rice prices by the second half of the year, particularly by September, is going down,” Balisacan said.
“It’s already past El Niño and the election in India is over, so all those restrictions and exports of major exporting countries are expected to loosen. And then the production is expected to increase and the global supply. That’s the forecast,” he added.
Balisacan also said the inflation rate for May is expected to be within the 2 to 4 percent target range.
“We are still aiming for two to four percent, the target for the year. I think that we should be there,” Balisacan said.
Recto, who sits on the seven-member policy making monetary board, said it was possible for the BSP to start cutting rates this year, likely followed by more rate reductions in 2025.
“Surely, I don’t expect interest rates to go any higher. If not, if there is time, they will start to go down, maybe 150 bps in the next two years,” Recto told an economic forum.
Annual inflation has quickened for a third straight month in April to 3.8 percent , bringing the average rate for the first four months of the year to 3.4 percent , still well inside the BSP’s 2 to 4 percent target range. – Angela Celis and Reuters
