Speculators are pushing food prices and other basic commodities up and blaming the government’s tax reform package, Agriculture Secretary Emmanuel Piñol said on Wednesday during the pre-State of the Nation Address (SONA) forum held at the Philippine International Convention Center in Pasay City.
“The TRAIN (Tax Reform for Acceleration and Inclusion) law has very little impact actually on prices. Prices in the market are rising because of speculation,” Piñol and added the government is addressing the issue.
He said middlemen and unscrupulous traders are using the tax reform law as a scapegoat to raise prices.
But he said prices of basic agricultural products could be addressed in the long term by solving farm productivity and market distribution challenges. He added the basic problem is the lack of capital of poor farmers for their production requirements.
Desperate farmers resort to borrowing from local traders or loan sharks who charge very high interest rates, which prompts them to raise their prices. The several layers of middlemen before a farm product reaches the consumers from the farmers also jack up prices. In many instances, middlemen earn more than the farmers, he said.
Piñol pointed out that market vendors likewise resort to informal sources, such as the “5-6” lenders, for their capital.
To address this problem, he said the DA has initially earmarked a P1-billion loan facility for farmers, with a six-percent interest rate without collateral cover.