New admin urged to focus on boosting local production

MANILA, Philippines — Outgoing Trade Secretary Ramon Lopez is recommending that the incoming administration focuses on strengthening local production to ensure stable supply of products, and to continue implementation of reforms to attract more investments that will create jobs.

In an interview with Teleradyo over the weekend, Lopez said the next administration may face more challenging times compared to the current set of leaders, with the invasion of Ukraine pushing up prices of fuel and other commodities including wheat, corn, as well as fertilizers.

As such, he offered advice to incoming Trade secretary Alfredo Pascual to focus on improving the country’s domestic production.

“Now is the time to step up local production especially in agricultural products so at least we will ensure we have food security,” he said.

As prices of goods depend on supply and demand, he said it is important to ensure there is always an available supply of goods.

If local supply is not enough to meet demand, he said there should be imports in order to reduce the prices.

Aside from improving local production, Lopez relayed to the incoming Trade chief to encourage more investments into the country and even go beyond the $9.1 billion annual average of foreign direct investments under the current administration.

He is hopeful reforms which seek to make the country more attractive for foreign investments such as the amendments to the Retail Trade Law, Foreign Investments Act, and Public Service Act, would enable the next administration to reap benefits in terms of more investments coming into the country that will create jobs.

As more investments are made under the next administration, Lopez said economic growth is expected to continue and stagflation or a situation of high inflation combined with high unemployment and stagnant demand in the economy, is unlikely to be seen in the country.

“Stagflation, it is unlikely because of the growth momentum we are experiencing despite the challenges,” he said.

On calls to suspend the collection of excise tax on fuel products as a form of relief amid rising prices, he said pursuing such would mean lower government revenues which would affect funding for projects, as well as lead to bigger fiscal deficit and government debt.

“That’s why our position is to keep it and if possible, look for other ways,” he said, noting the government is providing targeted subsidies to affected sectors.

As for the DTI’s proposal to remove the 30 percent tariff on electric vehicle (EV) imports for a period of five years, he said the agency is waiting for the results of the Tariff Commission’s hearing on the matter.

While he initially wanted the removal of the tariff on EV imports within the current administration, he said it might already be decided by the next administration given the lack of time.

The DTI proposed the temporary lifting of the 30 percent tariff on EV imports to encourage the use of such vehicles and as part of interventions given rising fuel prices.