Metrobank expects lower inflation in September amid rice price controls

Metrobank expects lower inflation in September amid rice price controls

This projection marks a decrease from August’s inflation rate of 8.7%, primarily attributed to the implementation of price controls on rice.

Ina Judith Calabio, Metrobank’s research & business analytics officer, remains cautious about rice prices, expecting them to continue growing at an average rate of 6.1% despite the price cap.

Notably, rice prices have risen from an average of P45.54 per kilogram a year ago to P48.33 per kilogram in September.

Calabio emphasizes that the price caps only apply to regular-milled and well-milled rice, while special and premium rice in the market still follow market-determined retail prices. Achieving 100% compliance from retailers may also be challenging, as it could result in financial losses despite the subsidies.

Rice holds a significant weight of approximately 9% in the inflation basket, making any substantial fluctuations in rice prices a crucial factor in influencing overall inflation.

Calabio said that, after thorough analysis, they expect rice-related inflation to settle between 6.6% and 7% (at a 95% confidence interval) in September. While this represents an improvement compared to August’s rate, inflation remains at an elevated level.

She also underscored the need to consider other contributing factors, such as the recent series of increases in gas pump prices during the month.