BBM on target
The ADB study found that the poor are highly sensitive to price changes in food, particularly staple food items such as rice.
Daily TribuneThe ADB study found that the poor are highly sensitive to price changes in food, particularly staple food items such as rice.
Doing the right thing, President Ferdinand "Bongbong" Marcos continues to keep his focus on food prices and the access of Filipinos, primarily the poor, to basic commodities.
Of all the agencies, he gave priority to the Department of Agriculture which he is the concurrent head.
The move, which has drawn criticisms from his detractors, proved well-timed as the global inflation crunch takes hold.
The Asian Development Bank, in a 2008 study when the world was engulfed by a financial crisis, underlined the severe impact of rising prices on the poor.
The study showed the dominating effect of rising food prices on poverty during a three-year study.
It showed the severity of poverty rose by 16.8 percent while the standard of living declined by about one percent over the period.
The study also suggested that the decline in the standard of living due to food price increases was particularly greater for the poorest sector.
Households struggling to meet the minimum standards of living might have no choice but to cut down spending on health and children's education.
The ADB study found that the poor are highly sensitive to price changes in food, particularly staple food items such as rice.
It showed that a 10 percent increase in food prices will create an additional 2.3 million poor people, while a 10 percent increase in nonfood prices will drive an additional 1.7 million people into poverty.
A 10 percent increase in the price of rice will force an additional 0.66 million people into poverty, while a 10 percent increase in fuel prices will cause an additional 0.16 million poor people.
Thus, the implication of an earnest effort of BBM to drive down the prices of the staple grain has contributed to shielding the poor who struggled during the pandemic from the worst impact of the inflation crunch.
Another significant finding of the ADB study was that the increase in food prices has been the major factor causing high inflation.
"It is wiser thus to direct government policies toward stabilizing food prices. Moreover, given these current trends, monetary policy may not be an effective tool to combat rising inflation," it indicated.
Such policies may push the economy into recession, which will hurt the poor even more, it warned.
The findings also supported temporary government intervention by freeing up imports that pulls down prices in the market.
It also prevents syndicates from exploiting the market, particularly during the Christmas season, when the demand for food peaks. The price of onion has risen to a ridiculous P720 per kilo when the country never had a shortage of the product even at this time.
BBM's focus on food and prices shows that he is on the right policy track.
