Solon cites options to cushion inflation

“There is little time for debate. This decision puts greater pressure on other measures to arrest the momentum, to prevent a wage-price spiral, and bring inflation back to low-4 percent zone,”Albay Rep. Joey Salceda said. (File photo: Joey Sarte Salceda/Facebook)

MANILA — Albay Rep. Joey Salceda on Monday cited alternative solutions to curve inflation following the rejection of the Committee on Tariff and Related Matters (CTRM) of the proposal to lower tariff rates on certain food imports.

Malacañang also clarified that no one in the Cabinet has endorsed the suggestion to impose zero tariff on some agriculture products. These food items include feed wheat, corn, vegetables, and fish.

Salceda said the government should arrest the momentum and bring inflation back to the four percent zone, noting that inflation may likely peak beyond 6 percent this month without aggressive economic measures.

“There is little time for debate. This decision puts greater pressure on other measures to arrest the momentum, to prevent a wage-price spiral, and bring inflation back to low-4 percent zone,” Salceda said.

Salceda urged President Rodrigo Duterte to issue a directive to all supervising regulatory agencies–such as the water regulator, Toll Regulatory Board, and Energy Regulatory Commission–to defer approval or suspend implementation of regulated price adjustments.

Salceda also called on the National Food Authority to import more, distribute the PHP27 per kilogram rice more aggressively, and target poor communities.

The lawmaker said “greater pressure” is on the Bangko Sentral ng Pilipinas (BSP) “for more tightening” of its monetary policy “to curtail aggregate demand which may jeopardize growth targets further down the road.”

Salceda stressed that it was food inflation of 7.1 percent that drove the 5.7 percent headline inflation in July.

He said among the food items, fish contributed 0.7pts, meat – 0.4 and vegetables – .4pts to the headline inflation. “Alone or together, they are certainly not small.”

He noted that reducing tariff barriers would “shift the supply curve to the right” so that existing players will “behave reasonably competitive” in pricing their products at the risk of new players.

It was earlier reported that President Duterte would issue an executive order, reducing tariffs on certain food imports as Congress goes on a break this week.

The recommendation to reduce tariffs on these imported products was among the counter-inflation measures proposed by Speaker Gloria Macapagal-Arroyo to Duterte’s economic team.

The inflation rate hit a five-year high at 5.7 percent in July due to the rise in the prices of food and non-alcoholic beverages, according to the Philippine Statistics Authority.