'High prices not RP's problem alone'

We are not alone – in experiencing high prices of goods and services, that is.

Deputy presidential spokesman Anthony Golez emphasized that the Philippines is not alone as most of the world is reeling from rising food and oil prices.

Interviewed over state-run dzRB, Golez reiterated yesterday that the government is exerting all efforts to reduce the impact of high prices on the people as inflation hit a 17-year high in August.

For the month of August, the National Statistics Office reported that average inflation was at 12.5 percent, higher than the 12.3 percent recorded in July.

Golez said the government continues to provide subsidies and other similar types of support to the masses through its “Katas ng VAT 1” program.

Billions have been spent by the government for this program, the funds of which were taken from the windfall proceeds of the value added tax (VAT) on oil.

He said the government continues to spend heavily on rice subsidies, which benefit both the farmers and the poor families that consume the rice.

The government purchases a substantial amount of rice from farmers at a premium and sells these to poor families at P18.25 per kilo, way below the average of P35 to P40 per kilo in commercial markets.

Deputy presidential spokesperson Lorelei Fajardo, on the other hand, said the government is also closely monitoring the prices of basic goods and commodities to ensure that these are at the right levels.

 ‘What efforts?’

However, senators questioned the government’s moves, saying its efforts were hardly felt, including the subsidies that were supposed to be directly and immediately reaching the people.

Senators Manuel Roxas II, who chairs the Senate committee on trade and commerce, and Loren Legarda, who heads the economic affairs committee, said aside from short-term solutions, they also could not see any long-term plans on the part of the administration for the country to combat rising prices.

Both senators said sufficiency of local food supply could bring down prices drastically.

Legarda also reiterated that poor people were complaining that they were not receiving the subsidies announced by the government on food, fertilizers and electricity.

“So where are these billions of subsidies from VAT revenues going? We have to know the beneficiaries of the billions of subsidies being bragged about by the administration,” Legarda said over dwIZ.

She said the government could not even exert enough pressure on big oil companies to roll back prices of fuel and other fuel products as the prices in the world market had gone down.

The two argued that said since the government had been refusing to remove or even suspend the imposition of VAT on fuel and consumer goods or agricultural products, then it must be able to show that the revenues from VAT were being spent wisely for the people.

“The government must shield its poorest citizens from the catastrophic effects of surging consumer prices,” Legarda said.

She said the government must realize that the people’s wages were not increasing as rapidly as the costs of goods and services.

She said many households have no choice but to cut down on expenses and live an even more austere lifestyle.

Crisis not yet over

Roxas said there should be no reason why the government could not keep prices of basic goods down so that every Filipino could live more comfortably.

He earlier criticized the pullout from stores of National Food Authority rice, which at P18.25 per kilo is subsidized by the government and is much lower than the regular P35 per kilo cost.

He also disputed the idea that the rice crisis was over, and called on the government to look for longer-term solutions.

Roxas said he could not understand why P70 billion was spent to import rice rather than on local agricultural development.

He also warned against blindly raising interest rates in an attempt to counter high inflation, saying this would only lead to more jobless people and further weakening of the economy. - With Aurea Calica