Agricultural output in quarter 4 (Q4) 2023 helped slow general inflation in the Philippines to 2.8% by January 2024.

Crop production from September to December 2023 was the key driver of easing inflation, which fell from the 3.9% of Q4 2022. 

In general, agriculture grew by 0.7%, year-on-year, in Q4, according to the government’s preliminary data of January 30, 2024.

Inflation in rice, however, appreciated from 22.6% in December 2023 to 19.6% in January 2024. This is despite the national subsidization of the price of milled rice to 41 pesos ($0.72) per kg in August 2023.

The Philippines, a net consumer and importer of rice, has seen its local supplies dwindle in tandem with diminishing global production. 

Bagong Pilipinas Project

Nevertheless, President Marcos’ government is using the accountability initiative, Bagong Pilipinas (New Philippines), to reestablish the country’s rice productivity. Among other ideals, the initiative seeks to rein in Philippines’ inflation through local productivity and improve the cost of living.

On February 6, 2024, the state announced the first harvest under this economic model on a 4.5-hectare patch of land. 

The first reaping ceremony produced 96 tonnes of rice and other vegetables, equal to PHP 7.3 million ($129,794).

The agricultural arm of Bagong Pilipinas employs the input of farming experts and that of persons serving in reformatory centers.

Other Agricultural Areas Lifting the Economy

Rice aside, almost all other agricultural products helped ease the Philippines’ inflation and uplift its economy from Q4 2023, onward.

Milk production rose by 1,372 metric tons in 2023, above the 2022 capacity due to a 45% increase in cattle numbers.

The country seeks to up milk production to 80 million liters by 2028, 2.5 times the current output.

Farm produce, on the other hand, increased by 0.1% between September and December 2023, while poultry grew by 7.8%.

Fisheries joined rice as the only other niche in the agricultural sector that saw a dip of 5.2% during Q4.

The good news, however, is that the current rate of inflation, the lowest since 2020, will bring down food prices. This is especially so since in the equivalent period of January 2023, inflation stood at 8.7%. As the year’s opener, the record rate brought about the year-long price hikes on basic groceries. The high inflation prompted the government to react by putting a price cap on milled rice. 

The Philippines now plans to import key commodities as buffer against an extended El Niño,  which might hamper domestic production.