Higher food prices due to ‘speculation’, not TRAIN law: DA chief

FILE: Piñol said unscrupulous traders and middlemen have found a scapegoat in the tax reform law and higher fuel prices. (Photo: Department of Agriculture/ Facebook)

MANILA — Department of Agriculture (DA) Secretary Emmanuel Piñol on Wednesday assured that the government is addressing the high prices of commodities in the market, as he downplayed speculations that the uptick is due to the imposition of the tax reform law.

“The TRAIN (Tax Reform for Acceleration and Inclusion) law has very little impact actually on prices. Prices in the market are rising because of speculation,” he said during the pre-State of the Nation Address (SONA) forum held at the Philippine International Convention Center in Pasay City.

Piñol said unscrupulous traders and middlemen have found a scapegoat in the tax reform law and higher fuel prices.

He, however, said that the prices of basic agricultural goods could be addressed in the long term if the problems in farm productivity and market distribution are resolved.

The agriculture chief noted that farmers usually encounter problems due to the lack of capital to finance their production requirements.

Farmers borrow money from local traders at high interest rates, prompting them to increase their prices, he said, citing as well the layers of middlemen who are earning higher than farmers.

Piñol pointed out that market vendors likewise resort to informal sources, such as the “5-6” lenders, for their capital.

To address this problem, he said the DA has initially earmarked a PHP1-billion loan facility for farmers, with a 6-percent interest rate without collateral cover.

“The result was good. For the PHP1 billion loaned, 96 percent is the repayment rate. For Cordillera farmers, 100 percent is the repayment rate. The loan has been increased for the year 2019 to PHP3.7 billion from PHP1 billion because of the success of the program,” bared Piñol.

For market vendors, he said President Rodrigo Duterte has decided to allot a loan budget of PHP1 billion, and is keen on increasing the amount to PHP6 billion.