Food price spike looms as agri production thins

CEBU, Philippines - Former budget secretary and one of the country’s known economists Benjamin Diokno warned consumers to prepare for rising food prices in the next few months, as the country’s agriculture production volume is thinning.

Diokno, who was in Cebu to speak before the members of the Philippine Retailers Association (PRA-Cebu) said that food prices will continue to increase, and will largely depend on the movement of the cost of fuel.

 He said the spiking food prices is affected by the country’s declining supply of agricultural products, as most agricultural lands are being converted into subdivisions, and into other commercial developments.

Food consumption accounts for 40 percent of household budget. This upswing movement of food prices may affect the daily budget allocation of every Filipino.

Because of this, more Filipinos will be forced to lessen the food consumption in the next few months, prioritizing only the basic commodities of data living.

If the fuel cost will continue to increase, there is a big possibility that food prices will shoot up, due to these two big contributors.

Diokno said in order for the Philippines to cushion the effect of food price increases to majority of the Filipinos, it has to strengthen the development of the domestic economy.

Diokno believes that reviving the manufacturing sector would help increase the employment opportunity for Filipinos, as well as improve the purchasing power of the consumers.

While China’s wage level is increasing, the Philippines should immediately take advantage of this development, by putting in place programs that would attract investors to invest in the Philippines’ manufacturing sector.

However, what is very important now, aside from competing with the wage cost level of China, is to fix the volatile power rate in the country. (FREEMAN)