The nation’s economic managers – Secretary of Finance Carlos Dominguez III, Secretary of Budget and Management Benjamin Diokno, and Socioeconomic Planning Secretary Ernesto Pernia – met with Speaker Gloria Macapagal Arroyo and other leaders of the House of Representatives last week to discuss the worsening problem of inflation.
Inflation—better understood by common ordinary folk as high prices – has been steadily rising since the start of this year, due to an unfortunate combination of high global oil prices, falling value of the Philippine peso, and increased taxes. It hit a five-year high in June at 5.2 percent. Then it went on to 5.7 percent in July, according to the Philippine Statistics Authority (PSA). It was just 2.4 percent in the same period last year.
The main drivers of the latest price increases were food and alcoholic beverages – up 7.1 percent in July. In a joint statement, Secretaries Dominguez, Diokno, and Pernia said bad weather in the country and in other rice-producing countries like Thailand and Vietnam had led to a decline in the Philippines’ rice supply. Another driver of inflation in July was higher transport costs, resulting from the latest rise in fuel prices. Housing, water, and electricity costs were also up.
In the closed-door meeting held at the House, the congressional economic team and the administration’s economic managers discussed several possible measures to stem inflation, including the importation of 500,000 tons of well-milled rice, removing tariffs on fish and meat imports, and lowering the “feed-in-tariff allowance” now included in the electric bills of all consumers to raise funds for renewable energy projects.
It is good to know that our nation’s highest officials are moving to meet the problem of rising prices, a problem which has been plaguing common ordinary folk for months now. During the meeting called by Speaker Arroyo, Secretary Pernia said she voiced her concern about inflation – “because this is really what matters to the people.” The challenge, Secretary Diokno said, is to convince lawmakers on the need for balance between the “structural reforms” targeted by the Duterte administration and the immediate concern of rising prices.
Along with these basic economic efforts of the government, there is need for various other government agencies, including local government units, to ensure that unscrupulous individuals are not manipulating market prices. With all such coordinated action, we hope consumers will be able to make needed adjustments in their budgets, and we will be able to weather this national economic challenge.