By Chino Leyco
The Department of Finance (DOF) claimed that rice is the culprit for the higher than expected inflation this year noting that the contribution of the staple food to the rate of increase in consumer prices soared tenfold.
In a statement, the Finance department said the contribution of rice has risen by 10-times to one percentage point of the inflation rate in the first nine months of the year, which also fuelled the cost of basic food items such fish, meat and vegetables.
Based on the Philippine Statistics Agency (PSA) data, rice was the number one contributor to inflation in September 2018, while food items in the consumption basket accounted for more than half of the inflation rate in the same month.
In its presentation during the latest Cabinet meeting, the DOF bared that in contrast, the contribution of non-food items such as electricity, gas and other fuels have slowed down since July this year.
“Rice tariffication and reforms in food policy are needed to address the repeated rice supply problems,” Finance Secretary Carlos G. Dominguez III said during the Cabinet meeting.
The rice tariffication bill, once passed into law, is expected to liberalize the importation of rice in the country. It will also help lower rice prices while providing enough support for local farmers who will be affected by the influx of cheaper rice imports.
The measure has been certified as urgent by President Duterte.
Lower by P2 to P7
Economic managers said liberalizing rice imports will lower the retail price of rice by P2 to P7 per kilo based on latest estimates, and reduce inflation rate by 0.4 percentage points.
Among the short-term measures recommended by the DOF during the meeting were for the Department of Agriculture (DA) to undertake steps to bring down food prices.
The DOF also suggested that the Departments of Social Welfare and Development (DSWD) and Transportation (DOTr) speed up the release and distribution of cash cards to the poorest households and fuel subsidy cards to operators of public utility vehicles, respectively.
The release of unconditional cash transfers by the DSWD and fuel subsidies through the Pantawid Pasada Program are among the social mitigation measures under the Tax Reform for Acceleration and Inclusion Act (TRAIN) that are meant to cushion the impact of inflation on vulnerable sectors.
“The DA, which is the key to bringing down food prices, has been empowered under several presidential directives to put in place measures to increase food supply and bring down food prices,” Finance Assistant Secretary Antonio Joselito Lambino II said.
These presidential directives include Administrative Order No. 13, which removed administrative restrictions on the importation of agricultural products.
The President also issued Memorandum Order (MO) 26 directing the DA and the Department of Trade and Industry (DTI) to implement measures to reduce the gap between the farm gate and retail prices of agricultural products.
MO 27, meanwhile, directed the DA, Department of the Interior and Local Government (DILG), Philippine National Police (PNP), and the Metropolitan Manila Development Authority (MMDA) to “adopt measures to ensure the efficient and seamless delivery” of imported agricultural and fishery products from ports to markets.
Memorandum Order 28 directed the National Food Authority (NFA) to immediately release existing rice stocks in its warehouses.
A death warrant
Meanwhile, pro-farmer congressmen slammed the unimpeded rice importation policy set by the Duterte administration.
“[First], it’s a death warrant to the agriculture sector especially our farmers. Second, it does not guarantee the lowering of prices because it enables and strengthens cartel operations,” said Anakpawis Party-List Rep. Ariel. Casilao.
The move, he said would not benefit Filipinos, especially farmers.
For Butil Party-list Rep. Cecil Chavez, this new government policy should be a temporary thing.
“At best, the policy of import-till-you-drop should be an ad hoc, temporary measure in answer to an emergency,” she said, adding, “We have to realize the great folly on relying on imports to fill our food security requirements.”
Chavez opined that the unimpeded rice import should be rescinded as soon as the country’s supply of the staple grain becomes secure. According to her, a “production-driven rice adequacy policy” should replace it.
“The trinity of delayed imports, natural calamities, and the failure to fund a viable rice production program caused the acute rice shortage, and of the three, only the factor of calamities is the one that cannot be reversed,” she said. (With a report from Ellson A. Quismorio)