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Broad measures set vs inflation in EO

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A comprehensive government response to rising prices will be embodied in an Executive Order (EO) that will mainly focus on the monitoring of the food supply chain, presidential spokesman Harry Roque said.

Roque said economic managers are drafting the measure that will mainly seek to remove “administrative constraints and non-tariff barriers” in the importation of rice, meat, sugar and vegetables.

Economic managers submitted proposals to address high inflation during the monthly Cabinet meeting held late Tuesday.

Among the proposals tackled during the meeting were the streamlining of the importation and distribution of basic food items, Roque said.

Economic managers attributed the inflation spike to the increase in prices of fuel, rice, fish and vegetables.

Some of the proposals in the draft EO are for the Department of Agriculture to issue certificates of necessity to allow fish imports; the immediate release of 4.6 million sacks of rice available in National Food Authority (NFA) warehouses; simplification and streamlining of licensing procedures for rice imports of the NFA through a presidential directive; the forming of a body that will monitor the hauling of rice from ports to NFA warehouses and retail outlets; the reduction of the gap between the farm gate and retail prices of chicken through the setting up of government retail outlets where producers can sell their products directly; the Sugar Regulatory Administration will open the importation of sugar to direct users and the Bureau of Customs will give priority to the release of essential food items at the ports.

Rice monitor set

The Department of Trade and Industry, NFA, Philippine National Police, National Bureau of Investigation and members of farmer groups will make up the rice transport monitoring team.

The Cabinet-level Economic Development Cluster (EDC) expects inflation rate to ease in the months ahead through the proposed measures.

Prices of rice, fish, vegetables and meat were among the highest contributors to the record-high August inflation rate of 6.4 percent.

“A committed effort from government in the agriculture sector to boost supply of key products and introduce policy reforms will bring down prices for all Filipino families,” Finance Secretary Carlos Dominguez III said.

Supply issues to blame

Dominguez said supply problems were the cause of higher food prices since the lowest regional inflation rate recorded by the Philippine Statistics Authority was in the food-abundant and agriculturally productive region of Central Luzon at 3.6 percent.

“We believe that when the measures take effect, the inflation rate increase will be moderated,” Dominguez said.

The EDC added some two million sacks of rice previously contracted are expected to arrive before the end of September.

The NFA Council also authorized the importation of five million sacks that will arrive over the next one-and-a-half months and another five million sacks to be imported early next year
To address the reported shortage in Zamboanga, Basilan, Sulu and Tawi-Tawi, 2.7 million sacks will be allocated to these areas, EDC said.

Economic officials added harvest has also started in many parts of the country that is expected to add 12.6 million metric tons of rice or the equivalent of 252 million sacks.

The EDC, however, urged the Senate to approve within the month the Rice Tariffication Bill which seeks to liberalize the entry of rice by scrapping the quantitative restriction on imports.

The House of Representatives had passed its version of the bill last 14 August and transmitted it to the Senate the following day.

Tariffication works

“The idea of tariffication is not theoretical, it works,” Dominguez said.

As for the spike in the prices of vegetables, the EDC said this was attributed to seasonal weather conditions.

The EDC said consumers can see relief in this area after the typhoon season.

Dominguez said this was the third time the EDC along with other concerned government agencies met to discuss ways to ease the impact of inflation on consumers. “We will continuously meet to address these inflation issues,” he said.

No cause for alarm

The biggest local trade group Philippine Chamber of Commerce and Industry (PCCI) has called for the immediate application of remedial measures to counter price surges.

PCCI honorary chairman Sergio Ortiz-Luis said the public has become focused on the inflation number “because it becomes political.”

Ortiz-Luis said the latest inflation figure is “not very alarming” and is “not very high,” considering the country’s history. He recounted that the Philippines has experienced higher inflation a decade ago and even recorded double-digit inflation rates in the past.

He added that based on studies, an economy that wants to grow by seven percent to eight percent cannot hold on to an inflation rate of only two percent to three percent. “Up to eight percent is manageable,” Ortiz-Luis answered when asked about the level of inflation that the group would consider alarming.

He likewise echoed the government’s claim that the impact of the Tax Reform for Acceleration and Inclusion law to price pressures is minimal.

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