Economists urge more food imports to temper price spikes

Karl Kendrick Chua

Acting Socioeconomic Planning Secretary Karl Kendrick Chua. FILE PHOTO

MANILA, Philippines — More economists are urging larger importation in view of pricy food that jacked up the inflation charge to a two-year excessive of 4.2 p.c year-on-year in January.

“Our priority right now is to ensure that food supply is adequate so that households affected by COVID-19 and the quarantines will not be doubly affected by the increase in food prices,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua, the federal government’s prime economist, stated in a press release late Friday.

Chua, who heads the state planning company National Economic and Development Authority (Neda), stated “[temporarily] allowing more importation of key agricultural products, while adhering to strict safety protocols to prevent entry of contaminated products, will help augment supply and manage inflation.”

“The committee on tariff and related matters (CTRM) has endorsed the proposed increase in the minimum access volume (MAV) of pork and the temporary decrease in the most favored nation (MFN) tariff rates of pork and rice, subject to the proper process and investigation by the Tariff Commission. All these can increase the food supply and stabilize food prices,” Chua stated.

The authorities reported final Friday that headline inflation or the rate of increase in costs of fundamental commodities zoomed previous the federal government’s goal vary of 2-4 p.c—thought-about to be manageable ranges—final month.

Faster costs hikes had been reported in meat merchandise, particularly pork amid tight provide due to the African swine fever scare.

Vegetable costs additionally continued to soar following the devastation wrought on agricultural produce by a string of robust typhoons earlier than 2020 ended.

Inflation’s affect on the poor was worse as they wanted to shell out more for food due to sooner price hikes additionally reaching a two-year excessive of 4.9 p.c in January throughout the basket of products and providers they often consumed.

Economists had been additionally frightened that elevated client costs could temper consumption at a time when the pandemic-battered economic system wanted a lift to recuperate from final yr’s gross home product (GDP) drop of a document 9.5 p.c, the worst post-war recession.

Despite January’s higher-than-expected charge, Chua stated the financial workforce nonetheless expects inflation to be “manageable as we continue to reap the benefits of the Rice Tariffication Law.”

“We passed the Rice Tariffication Law to address the rice shortage and related price hikes last 2018. As a result, rice prices decreased by around 10 pesos per kilo from its peak. In January, rice inflation was close to zero at only 0.1 percent. Just like before, the government continues to be proactive in addressing spikes in inflation as this affects the poor the most,” Chua stated.

In 2018, inflation averaged a 10-year excessive of 5.2 p.c due to food provide bottlenecks, new or larger excise taxes slapped on consumption underneath the Tax Reform for Acceleration and Inclusion Act or TRAIN Law that took impact that yr, in addition to skyrocketing world oil costs again then.

Following rice commerce liberalization that enjoined entry of more imports, the Filipino staple food posted deflation or decrease year-on-year costs from May 2019 up to November 2020.

But since December final yr, nationwide rice costs inched up primarily due to provide points in Metro Manila.

In a webinar Friday, former socioeconomic planning secretary and Inquirer columnist Cielito Habito stated the inflation charge would probably common 4-5 p.c this yr, therefore a necessity to ramp up food importation.

“Right now, we are forced to open agriculture—in pork, because of the shortage due to the African swine fever. And this no longer the time to oppose imports because the reason prices are skyrocketing is the sheer lack of domestic supply,” Habito stated.

Roehlano Briones, senior analysis fellow on the state-run Philippine Institute for Development Studies (PIDS), stated able paper submitted to the Senate final week that “rather than rely only on price freezes, we recommend [to] further liberalize private-sector importation by reducing tariffs on meat, fish, and vegetables.”

But House minority chief and Bayan Muna Rep. Carlos Isagani Zarate on Saturday opposed a looming opening up of the home market to an inflow of imported items amid a pandemic-induced recession.

“The Duterte administration’s policy of further liberalization of our economy will only aggravate rather than address the runaway inflation,” Zarate claimed in a press release.

“More importation would just make us more dependent on other countries and control not just the prices but even our food security. For us to have a more secure and stable economy we must increase support to our local farmers and producers especially in agriculture. If the government will just keep doing this liberalization policy,  which has already  failed us for decades, then high inflation would certainly be a perennial problem—at the expense of millions of our poor people,” Zarate added.

For Zarate, “more protectionist measures and government aid to local producers, as well as consumers, are needed to stem inflation.”

“Different administrations have continuously pushed for liberalization of our economy for decades. And now, yet again, the present administration is pushing for Charter change to still open it even more. But this policy has already failed our economy miserably. We must look for other ways in reviving our economy,” Zarate stated.


Read Next

Don’t miss out on the most recent information and information. ch like us ch follow us

Subscribe to INQUIRER PLUS to get entry to The Philippine Daily Inquirer & different 70+ titles, share up to 5 devices, pay attention to the information, obtain as early as 4am & share articles on social media. Call 896 6000.

Source Link –

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

five × three =

Back to top button