USDA: Peso slide seen lifting rice prices

The continued weakening of the Philippine peso against the United States (US) dollar will likely lead to higher retail rice prices amid rising import costs, according to the US Department of Agriculture (USDA).

- BY DEXTER BARRO II

In a report dated Feb. 3, the USDA said there is strong potential for additional upward pressure on retail prices of the household staple as the peso continues to underperform.

"Continued depreciation of the Philippine peso is expected to increase the cost of imports, affecting import prices for both rice and farm inputs," the USDA said.

The US agency expects higher costs for importers and traders to be ultimately passed on to consumers, undermining the government’s efforts to keep rice affordable.

The local currency has been on a steep decline in recent weeks, largely influenced by a massive corruption scandal in public infrastructure that led to a sharp drop in government spending.

The peso is feared to fall to P60 per US dollar, although the government has indicated that interventions are already in play to avert this threat.

Despite the government’s efforts to reduce reliance on imports, the USDA said the Philippines will still depend on imported rice to meet rising demand.