Rice price hike may keep inflation up
Will the price of rice go down any time soon? Data show it would be quite challenging.
Inflation may have abated in the merry month of December, but startling spikes in the price of rice prevented overall inflation from going down further.
Rice prices jumped by almost a fifth year-on-year in December 2023, or about 19.6%. If a kilo of rice cost PHP 40 in December 2022, it would now be around PHP 48 a kilo.
For ordinary Filipinos, this is a big jump. A person on the street consumes approximately 190 kilos of rice a year – around PHP 7,600 per year if a kilo of rice costs PHP 40.
If the price has risen to PHP 48 per kilo, that is PHP 9,120 per year. That is a substantial increase for low wage earners.
Here is a chart showing the current trajectory of rice prices:
Rice inflation last December was the highest since March 2009. Monetary policy will likely remain sufficiently high as supply side risks to inflation continue to exist.
Next week, more information about other inflation risks will be discussed, including the ominous geopolitical tensions in the Middle East and the Panama Canal drought.
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ANNA DOMINIQUE CUDIA, MBA, CSS, is the Head of Markets Research at Metrobank’s Trust Banking Group, spearheading the generation and presentation of financial markets insights to internal and external clients. She used to be with Metrobank’s Investor Relations, where she brought in international awards and took part in various multi-billion peso and dollar capital raising activities. She has a Master of Business Administration (Finance) degree, with distinction, from the University of London, and a Bachelor of Science in Business Administration degree, cum laude, from the University of the Philippines. She also passed the CFA Level I exam and is a Licensed Fixed Income Market Salesman (FIMS), a Certified UITF Sales Person (CUSP) and a Certified Securities Specialist (CSS). She is a naturally curious person and likes to travel here and abroad.
SOPHIA THERESE “PIA” BONIFACIO is a Research Officer at Metrobank’s Trust Banking Group, covering macroeconomic research and the consumer sector. She obtained her Bachelor’s degree in Economics with a Specialization in Financial Economics, cum laude, from the Ateneo de Manila University and is a Certified UITF Sales Person (CUSP). On the daily, Pia spends her time with her best friend – a 9-year-old Chow Chow named Yao Ming.