MANILA -- A member of the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) on Wednesday said inflationary pressures have eased for the moment but additional measures are needed to ensure that supply-side issues can be avoided in the future.
MB Member V. Bruce J. Tolentino, in a brown bag session at the central bank office in Manila, said risks to inflation has been lessened because the supply of rice has increased due to harvest season.
“Harvests are in and even for meat and vegetables and fish, the pressure is down. We’re being helped by the oil, so in total, the big things – food prices and rice prices – the pressure is off right now,” he said.
Supply deficiencies in primary food items, particularly rice, was the main reason for the shooting up of the inflation rate to 6.7 percent in the first 10 months this year.
However, the October figure is steady compared to the previous months’ level and authorities have noted that month-on-month upticks have slowed due in part to remedial measures implemented by government beginning September.
These measures include the directive for the National Food Authority (NFA) to immediately release rice stocks in all its warehouses nationwide to boost supply in retail outlets.
Malacanang also directed several other agencies to ensure that supplies, particularly rice imports, are safely delivered from the ports to NFA warehouses and the markets.
With the decline in price pressures, Tolentino said there is a need to put in place rice tariffication as well as deregulate the NFA.
The Department of Finance (DOF) has proposed rice tariffication to ensure that more businessmen can import rice, and in turn, boost domestic supply.
Just this year, the government scrapped the rice importation quota and instead wants to impose levy on rice imports.
On Wednesday, the Senate ratified the bicameral conference committee report on the proposed rice tariffication measure.
Aside from these two measures, Tolentino said that for medium-term the government should enhance irrigation and drainage systems to increase cropping intensity and reduce loss from flooding.
Long-term measures should include tapping of science and technology to ensure high productivity and resilience.
Tolentino said that for one, although rise supply issues have been addressed a bit “it will happen again if we don’t make the changes.”
He explained that “through rice tariffication, we will be able to bring in more rice.”
“We will be able to feed more people at lower prices. We will be able to push our farmers to compete," he said.
The welfare of the farmers should also be prioritized to make them competitive, he said.
“Let’s invest in irrigation. Not only invest in irrigation but invest in water management because sometimes our irrigation works so well that we flood the rice fields and crops die," he said.
"We also need to invest in science and technology to enable the rice and rice farmers be more resilient and be able to combat the impact of climate change,” he added. (PNA)
