MANILA -- The countrys economic managers are pushing measures to temper growing inflation. A key measure is liberalizing rice trade in the country, according to NEDA chief Ernesto Pernia.
“If the Senate and Congress can pass the bill on rice tariffication, for example tomorrow, that would have already an impact, very noticeable impact on food inflation especially,” said Socioeconomic Planning Secretary Ernesto Pernia in a press conference on Thursday.
Pernia says the proposed replacement of quantitative restrictions on rice with tariffs will have a “bigger impact” in addressing inflation because rice has a dominant weight on the food basket of consumers, especially the poorest 30 percent. This will allow more importers to bring in larger quantities of the commodity at cheaper prices.
“Our inflation is mostly caused by the supply side: the availability of goods, high global oil prices. Those are the main causes of supply side inflation and the unavailability of rice on time,” he explained.
Along with rice import tariffication, Pernia said the lowering of tariffs on selected basic commodities to a uniform five percent agreed among economic managers is intended as a temporary measure to alleviate the high food prices.
Proposed tariff reductions will cover farm products like pork, corn, feed wheat and fish.
“The single rate reduction is a good strategy because it does not affect consumption much. It is easier to monitor and implement. The measure is temporary as the tariffs will revert once we get back to our normal inflation target,” he said.
For her part, National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon underscored the need for the country to build up the resilience of its agriculture sector so it will not be weather-dependent.
“We should be doing biotechnology and if we can have more resilient agriculture. What we forecast is that there would be (inflation) tempering towards the fourth quarter especially if it’s the impact of tax reform (law), it should dissipate,” she said in an interview.
The country’s inflation rate picked up to 5.7 percent in July from the previous month’s 5.2 percent, brought about by the spike in the prices of food and non-alcoholic beverage. (with reports from PNA)