Aquino warned of rice crisis
Intel body cites threat to national securityBy Tony S. Bergonia
Philippine Daily Inquirer
MANILA, Philippines—Rising costs of basic commodities and services in the country and a shrinking rice supply have become a national security concern, according to a report by the National Intelligence Coordinating Agency (NICA).
The report, prepared on Feb. 20 and a copy of which was furnished President Benigno Aquino III, said one of the possible flash points being watched by the local intelligence community was the supply and prices of rice worldwide. Soaring prices of cereals due to production shortfalls led to food riots in several countries and toppled a government in 2008, while prompting the Philippines to buy huge volumes of rice, which it sold to the poor at a discount. A top security analyst, who helped prepare the NICA report, said early signs of unrest as a result of the price increases this year were being watched closely. Pockets of protesters have been holding rallies against price increases and a nationwide strike called by the transport sector is a cause for concern, said the security analyst, who asked not to be named because of the nature of his work. “The sources of unrest are not just terrorist movements or political conflicts, but also issues of the stomach. The most vulnerable of people are the ones who are hungry,” he said. In March, the average price of rice in the international market was a little over $500 a ton, according to United Nations’ Food and Agriculture Organization (FAO). The agency said recently that food prices worldwide this year were about 37 percent higher than last year’s. In the country, the average retail price of rice ranged from P30 to P35 a kilogram, the Department of Agriculture’s Bureau of Agricultural Statistics (BAS) reported on April 9. The NICA report came a few days before Social Weather Stations released the findings of its survey on poverty that said at least two out of every 10 Filipinos had experienced hunger this year and more than half of the country’s population rated themselves as poor. Unusual weather The NICA report, tagged as confidential, said unusual weather patterns brought by climate change and upheavals worldwide were exacting a heavy toll on food supply and costs in many parts of the world, including the Philippines. Some of the writings on the wall that point to a potential crisis in rice supply, according to the report, are the following: • Weather disturbances—flooding and drought—“have greatly affected food production worldwide.” • Rice-producing countries, “without any exemption … experienced overall reductions in production.” These are the Philippines, Thailand, Vietnam, Pakistan, India, China and Cambodia. • Massive losses in wheat production due to flooding and a cold spell in Australia, Russia, Ukraine and countries in Eastern Europe are likely to force wheat consumers to shift to rice, further straining worldwide supply. “Wheat affects rice importation because rice and wheat are reciprocal alternatives, being similarly the world’s most important staple food,” the NICA report said. • A warning made by the FAO of a worldwide food crisis as a result of sharp declines in international food production.
IMF forecasts steady growth
THE PHILIPPINES should see its economy grow by 5% this year and the next, the International Monetary Fund (IMF) yesterday said, as broad-based recovery continues in most of Asia.
In its latest World Economic Outlook, released ahead of the IMF and World Bank’s spring meetings in Washington this weekend, the intergovernmental organization said Asia would still outpace other regions even as growth moderates to "more sustainable rates." Its 5% forecast for the Philippines, unchanged from December, is lower than the government’s 7-8% target but is identical to the 2011 projections of the Asian Development Bank (ADB) and the World Bank. The ADB and the World Bank, however, see Philippine growth picking up to 5.3% and 5.4%, respectively, next year. Rising consumer prices are the major downside risk for the region, the IMF said. "[I]nflation is expected to continue increasing this year across much of developing Asia," it noted. The IMF forecast inflation to average 4.9% this year in the Philippines, higher than 2010’s 3.8%, before moderating to 4.3% in 2012. Both estimates are at the upper bound of the central bank’s 3-5% target range for both years. The ASEAN-5 region of which the Philippines is a part will see growth ease to 5.4% this year from 2010’s 6.9%, to be led by Indonesia whose economy is expected to expand in 2011 by 6.2%, up from last year’s 6.1%, and by 6.5% next year. Economists agreed with the IMF forecasts and said they continued to expect sustained growth for the Philippines. Standard Chartered economist Simon Wong, in an e-mail, said risks would come from "rising CPI (consumer price index) and Japan’s quake in the near term..." "[B]ut we continue to expect a stronger global recovery fuelled by the US and Europe will help to sustain PH (Philippine) growth this year, through stronger remittance and exports," he added. University of Asia and the Pacific economist Cid L. Terosa said, "Rising prices will dent growth this year. They will cut growth by 0.5-1%." Asia, the IMF said, will see export growth "moderate from last year’s very rapid pace but will remain robust as gains in market share and increased intraregional trade partially offset the weakness in final demand from advanced economies." "Capital flows to Asia are likely to continue, driven by both cyclical and structural factors," it added. "Autonomous private consumption growth should remain strong, supported by still-rich asset valuations and improved labor market conditions."
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