The Philippines should import more rice to cover losses in the production of the staple food due to damage inflicted by typhoon Lando in Northern and Central Luzon, the Finance Department said Friday.
Finance Undersecretary and chief economist Gil Beltran said more rice imports were needed to avoid a sharp increase in the domestic price of the commodity.
“The country may have to import more rice to replace these losses in domestic production and avoid triggering an inflationary spiral,” Beltran said in the latest finance economic bulletin.
The average inflation in the first nine months of the year dropped below the government’s target of 2 percent to 4 percent.
Data from PSA showed that the inflation rate fell to 0.4 percent in September from 0.6 percent in August and 4.4 percent in the same month last year. The average inflation in the first nine months of year stood at 1.6 percent due to low oil prices and stable commodity prices.
Beltran said the rice buffer could drop below 50 days if the losses from the typhoon were not replaced.
“Rice buffer of close to the September 1 level of 58 days is needed to ensure rice price stability,” Beltran said.
He said farmers needed insurance protection to enable them to recover quickly from natural disasters.
“Information dissemination of the new Insurance Commission-approved micro agri framework will enable private sector providers to start obtaining IC approval for micro-insurance products for sale to farmers,” he said.
Beltran also said an abrupt repair and rehabilitation of the destroyed infrastructure in the devastated areas must ensue.
“Aside from ensuring connectivity, infrastructure spending will generate non-farm economic activity that will mitigate the adverse impact of the disaster,” he said.
Meanwhile, Economic Planning Secretary Arsenio Balisacan said rice importation was needed to prevent higher prices.
“It’s a choice you have to make, you import or you want the prices to sky-rocket again,” Balisacan said during the sidelines of press briefing in Mandaluyong City.
Baliscan said, however, that the P7.5-billion damage to agriculture in Central Luzon would not drag economic growth.
“So far the P7.5-billion damage on crops [is not that significant on the] almost P12-trillion economy,” he said.
“It’s not the growth matter here it’s the well-being of the people,” he added.
Balisacan said the government might have to re-asses its El Nino response plan after an initial budget proposal of P19.2 billion due to the heavy damage from typhoon Lando,
“In fact we would have to re-assess the situation because you know central Luzon is the rice bowl,” he said.
“The budget can be revised but the importation we have to look at the plus side and the downside. The downside is we have production affected. The plus side is we may have favorable harvest in some other places not affected,” Balicasan said.