Imports seen easing food inflation

The government must allow more imports of agricultural products to ease food inflation within the 2 to 4 percent target of the Bangko Sentral ng Pilipinas this year, an economist has said.

Professor Ramon Clarete of the University of the Philippines Diliman told Daily Tribune that growth in imports must support the central bank’s monetary policy in order to pull food prices down.

“Overall inflation fed by high food prices is expected to still be above the BSP ceiling rate of 4 percent,” Clarete said.

While a higher BSP policy rate can lower prices by tempering consumer demand for goods like food products, it also threatens to dampen business activities, he explained.

“Monetary correction has limited use, without sacrificing economic growth too much,” the economist stressed.

Since last year, BSP has raised its policy rate by 400 basis points to control overall inflation, which slightly eased to 8.6 percent last month after climbing to 8.7 percent in January, the highest in 14 years.

Economists, however, said the limited supply of some agricultural products pushed food prices up.

The highest prices were seen in sugar and desserts which eased to 37 percent inflation last month from 38.8 percent in January, after the government ordered the importation of 440,000 metric tons of sugar on 15 February.

Enough sugar

Department of Agriculture spokesperson Rex Estoperez said last Friday that the sugar supply will be sufficient this year due to imports and constant monitoring by authorities over smugglers and hoarders.

The DA official said illegal traders have been able to manipulate prices for a long time now because of weak operations.

Thus, the DA and other government agencies have been aggressive in stopping smuggled products from reaching markets and in apprehending hoarders.

Onion prices soared up to P800 per kilo last December amid the hoarding that created an artificial supply shortage.

To meet consumer demand and lower prices, the agriculture department ordered the importation of 21,060 metric tons of onions in January.

The latest government data, however, showed prices of onions at still P120 to P150 per kilo, higher than the DA’s target of P80 to P100 per kilo.

Meanwhile, prices of refined sugar have been down to P97 per kilo from P102 per kilo.

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