MANILA -- The administration's economic managers have proposed nine measures to immediately address food supply issues to bring inflation down by an estimated 2.4 percent.
Budget Secretary Benjamin Diokno, in an interview after economic officials' meeting with Sen. Loren Legarda on Friday, said they are focusing on four food items, whose supply problems brought up August's inflation rate by about 2.4 percent.
Diokno was referring to fish, rice, meat and vegetables, all of which registered faster inflation rates in recent months due to supply-side factors.
To address the big contribution of these items in the rise of domestic inflation, economic officials have proposed the implementation of several measures, such as the release of about 4.6 million sacks of rice currently available in National Food Authority (NFA) warehouses, replicating of issuance of certificates of necessity to allow fish imports to be distributed in wet markets around Metro Manila and other parts of the country, issuance of an Executive Order (EO) that will simplify and streamline licensing procedures for NFA’s rice imports, reduction of gap between farmgate and retail price of chicken, importation of sugar to direct users, and for the Bureau of Customs (BOC) to prioritize the release of essential food items in the ports.
Economic managers said a draft EO for these measures has been submitted to the Office of the President. Diokno said they target to implement these measures within the month to help stabilize the rate of price increases, which has been posting elevated levels for several months now.
Last August, inflation rose to a multiyear high of 6.4 percent from month ago’s 5.7 percent, bringing the average to date to 4.8 percent. The government’s inflation target for this year until 2020 is a range of 2 percent to 4 percent.
Economic officials expect inflation to peak in the third quarter this year and go back to within-target levels in 2019.
Meanwhile, the country is bracing for Typhoon Ompong (international name “Mangkhut”), which has already wreaked havoc in Guam.
Diokno declined to indicate its possible impact on the Philippines’ food supply and inflation, saying they have not discussed this.
He also said that even as inflation to date is posting multi-year highs, people should stop characterizing it as runaway inflation, noting that this is an “irresponsible” statement.
“Runaway inflation is associated with hyperinflation where even the central monetary authorities have no handle of what’s going on,” he said. Hyperinflation happens when rate of price upticks rise uncontrollably.
Diokno said the country registered inflation rates that are higher than the current levels, reaching 50 percent during the Marcos administration, more than 20 percent during the first Aquino administration, and more than 10 percent during the Ramos, Estrada and Macapagal-Arroyo administrations.
“Right now, we have peaked at 6.4 percent but the average inflation is still low. It’s irresponsible to characterize what’s happening as runaway inflation. Let’s not panic,” he said.
“Our central monetary authority is very capable and we have to have a lot of tools,” he said, adding that the correct term to describe the current inflation levels is “slightly elevated.” (PNA)
