THE Economic Development Cluster of the Duterte administration expects inflation rate to moderate in the coming months from a nine-year high of 6.4 percent in August once the immediate measures to tame the soaring consumer prices are implemented.
Chaired by Finance Secretary Carlos Dominguez III, the EDC said inflation was expected to decelerate once these measures were in place.
With rice, fish, vegetables and meat among the highest contributors to the August inflation rate of 6.4 percent, Dominguez said “reforms in agriculture will continuously be implemented to address the supply issues causing the rise in food prices.”
“A committed effort from government in the agriculture sector to boost supply of key products and introduce policy reforms will bring down prices for all Filipino families,” Dominguez said.
He said supply issues as the cause of higher food prices was supported by data, showing the lowest regional inflation rate recorded by the Philippine Statistics Authority in the food-abundant and agriculturally productive region of Central Luzon at 3.6 percent.
“We believe that when the measures take effect, the inflation rate increase will be moderated,” Dominguez said.
The measures include the commitment of the Department of Agriculture to replicate the issuance of certificates of necessity to allow imports to be distributed in the wet markets in Metro Manila and to the other markets of the country.
On rice supply issues, 4.6 million sacks of rice available in the warehouses of the National Food Authority will be immediately released to the market across the country. The government also expects approximately 2 million sacks of rice previously contracted to be delivered before the end of September.
The NFA Council authorized the importation of 5 million sacks that will be arriving over the next one-and-a-half months and another 5 million sacks to be imported early next year.
To address the reported shortage in Zamboanga, Basilan, Sulu, and Tawi-Tawi, 2.7 million sacks will be allocated to these areas. In addition, harvest has also started in many parts of the country, with the projected harvest for 2018 of 12.6 million MT of rice, the equivalent of 252 million sacks.
The economic managers have also agreed to recommend to the President to issue a directive that will further simplify and streamline the licensing procedures for rice imports of the NFA.
The Department of Trade and Industry, NFA, Philippine National Police, National Bureau of Investigation, and farmer groups will form a monitoring team to closely watch over the transport of rice from ports to NFA warehouses and retail outlets.
To reduce the gap between the farm gate and retail prices of chicken, the DA and DTI will convene poultry producers and set up public markets where producers can sell directly to the end customer. The DA will provide cold storage facilities for this purpose.
The Sugar Regulatory Administration (SRA) will open the importation of sugar to direct users to moderate costs for consumers; and the Bureau of Customs will prioritize the release of essential food items in the ports.
At the same time, the EDC also urged the Senate to approve within the month the Rice Tariffication Bill, which seeks to liberalize the entry of rice by scrapping the quantitative restriction (QR) on its imports. The House of Representatives has already passed its version of this bill last Aug. 14 and transmitted it to the Senate the following day.
Dominguez said liberalizing imports to pull down prices has already been proven to work in the case, for instance, of fertilizers, which used to be exorbitantly priced but became cheap enough for farmers to
afford when import controls were removed on these products during the former Corazon Aquino administration.
“This idea of tariffication is not theoretical, it works,” Dominguez said.
As for the spike in the prices of vegetables, the EDC said this was attributed to seasonal weather conditions. The EDC said consumers can see relief in this area after the typhoon season.
Dominguez said this was the third time the EDC along with other concerned government agencies met to discuss ways to ease the impact of inflation on consumers. “We will continuously meet to address these inflation issues,” he said.
The EDC met last Wednesday on the same day that the PSA reported that headline inflation accelerated to 6.4 percent year-on-year in August 2018, faster than the previous month’s 5.7 percent and the 2.6 percent of the same period last year.
The highest contributors to inflation in August were electricity, gas, fuels, fish, rice, personal transport, vegetables, and meat.
The August inflation was the fastest in more than nine years since the 6.6 percent in March 2009 and surpassed estimates both from the government and private sector economists.
This brought inflation in the first eight months to 4.73 percent, well above the government’s official target range of 2 to 4 percent for the year.
