House seeks stronger measures vs inflation

MANILA, Philippines — Leaders of the House of Representatives called yesterday for stronger counter-inflation measures with the rate of increase in the cost of goods and services remaining at 6.7 percent in October, the same level as the previous month.

Albay Rep. Joey Salceda, who is Speaker Gloria Macapagal-Arroyo’s economic adviser, reiterated the House leaders’ proposal for President Duterte to reduce or remove tariff on food imports.

Another resident economist in the larger chamber of Congress, Rep. Michael Romero of 1-Pacman, urged the government to create a “national strategic rice reserve” that could be tapped whenever rice prices go up.

Salceda said the window for the President to reduce tariff on food imports through an executive order “closes on Nov. 12 when Congress returns to session.”

“Aside from reducing costs, lower tariffs also induce lower prices as markets for food products become more contestable,” he said.

He said the National Food Authority (NFA) should expedite the importation, delivery and distribution of 800,000 metric tons of rice.

He noted that increased rice and fish prices were the major drivers of the 6.7-percent inflation in October, “suggesting that government measures have yet to make a dent and take traction.”

Salceda pointed out that rice prices “continued to accelerate from 10.4 percent in September to 10.7 percent in October as importation remain logistically constrained,” while fish prices further rose by 13.8 percent from 13.4 percent despite imports.

He also called on regulatory agencies to postpone or defer implementation of “regulated price hikes” like those on fuel, water and transportation.

In proposing the creation of a national strategic rice reserve, Romero said the rice market “is often beset with wild price swings.”

“We must be ready for those swings. We must have a strategic rice reserve that will be continually maintained, drawn from and replenished to make sure the stocks are always new. This strategic rice reserve is what will shield Filipinos from fluctuations of rice prices,” he said.

He said this could be a new role for the NFA when rice importation is liberalized with the replacement of volume restrictions with tariff on rice imports.

Romero explained that a buffer, such as what NFA is trying to maintain, is often insufficient to influence prices, while reserves are intended to flood the market to force prices down.

Another House member, Leyte’s Henry Ong, expressed support for his colleagues’ call for more vigorous measures to fight inflation.

“With the October inflation rate staying at 6.7 percent, the same level as in September, there very clearly is a great and urgent need for much stronger anti-inflation measures,” he said.

He urged President Duterte to heed the clamor for the scrapping of fuel taxes.

Palace discretion

Finance Assistant Secretary Antonio Lambino Jr. said it’s Malacañang’s discretion to push through or not with the suspension of additional fuel excise tax by next January.

“The economic managers submitted their recommendation to suspend the next tranche of the increase in excise scheduled for January 2019. That recommendation stands,” he said at a press briefing in Malacañang.

“It is an official document that we need to receive from the Office of the President in order to implement that recommendation,” he said.

Lambino was referring to the DOF recommendation made when the price per barrel for Dubai crude and MOPS was above $80. The economic team also took into consideration the futures markets that showed prices at $80 and above for November and December.

“If we look at the increase in diesel from December 2017 to October 2018, we can see a P15 per liter increase,” he said, and that this means P2 should be added to the excise tax for January next year.

Amid rising food prices, the country’s agriculture sector meanwhile failed to maintain its upward streak, contracting nearly one percent in the third quarter.

After six quarters of growth, the latest report from the Philippine Statistics Authority (PSA) showed that the local farm sector declined 0.83 percent in the July to September period, a reversal from the 2.32 percent growth in the same period last year.

For the nine-month period, the agriculture sector only grew 0.15 percent compared with the expansion of 4.64 percent in the first nine months of last year.

The Department of Agriculture (DA) already said it sees no significant increase in the third quarter in view of recent consecutive typhoons that devastated Central Luzon.

“Climate change is now the biggest challenge to agriculture, especially the crops sector. The DA, in coordination with local government units and other  agencies, will have to review the planting calendar while fisheries will have to focus more on aquaculture and mariculture,” Agriculture Secretary Emmanuel Piñol said in a statement.

University of Asia and Pacific professor and agriculture economist Rolando Dy said the sector’s performance for the whole year would just be flat.

“The third quarter is already expected. I was even projecting a decline of one to two percent. The likelihood of negative growth for 2018 is given,” Dy told The STAR.

Meanwhile, the agricultural sector, at current prices, grossed P409 billion, up seven percent from P383 billion recorded in 2017.

Total value for the first nine months reached P1.29 trillion, seven percent higher than the P1.21 trillion in the comparative period. – Christina Mendez