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Sacrifice or sacrificed?

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BUSINESS BEAT                                                                                                                                                

By MELITO SALAZAR JR.

Melito Salazar Jr.

Melito Salazar Jr.

It would seem strange that in a season of merrymaking, I would write about sacrifices.  Yet our Christian faith teaches us that as we celebrate the birth of the Saviour, we acknowledge that Jesus was born a man, lived a life of sharing and suffering (bore torture, humiliation and death on the cross) to set us free.  Daily there are Filipinos who sacrifice or are being sacrificed because those who have power over their lives make decisions for the “greater good.”

The foundation of a country’s food security (the producers, farmers and manufacturers) are in a period of globalization  the first to sacrifice or be sacrificed.  When supply is down and inflation goes up, the immediate solution is to flood the market and the fastest way is to resort to importation.  By liberalizing importation through tariffication rather than a quota system, supply is expected to go up but this will be to the detriment of the rice farmers.  The cost of production in the rice exporting countries like Vietnam are so low compared to the Philippines that even tariffs of 35% will still make imported rice cheaper.  But our policy makers would rather sacrifice the interests of the rice farmers to the altar of the Filipino consumer.

Improving the agricultural sector has always been anchored on better farm machinery, extension and training on best practices, logistics improvement (post-harvest facilities and farm-to-market roads).  Our policy makers forget the centuries-old relationship between traders and farmers of indebtedness that keeps the farmers below the poverty levels.  An innovative solution would be to transfer the billions of farmers’ debt from traders to government financial institutions leading to farmers earning from their produce.

Philippine manufacturers have persevered despite the high cost of doing business brought about by very inadequate infrastructure and lack of supporting industries forcing them to import many of their inputs.  Today the clogging of the piers has led to doubling of transport costs, the peso depreciation has increased input costs, and the threat of removal of investment incentives has impacted on fund generation for innovation and expansion.  The road network improvement is for the riding public not the commercial sector.  I have longed for the day when a national railway system will link industrial estates all over the island with ports for faster transport of cargo without adding to the still inadequate road and highway system.

The ultimate sacrificial lambs are the Filipino masses as the Duterte administration pushes for implementing higher excise taxes based on projected decrease in inflation.  What is forgotten is that the high inflation rates in 2018 have significantly decreased the purchasing power of the consumers’ peso and many have depleted their savings.  Unlike the favored military and police, the Filipino labor force’s compensation has lagged behind inflation increases.  Lowering of income taxes does not help them because their income brackets are not subject to income taxes.  Rather they are made to bleed by the excise tax which increases the cost of their daily transport and essential expenditures.  The Duterte administration should restore the Filipino masses income and purchasing capability to pre 2018 conditions before even thinking of making them pay more in 2019.

This season let us not only commiserate with those who bear the burden of the policy decisions of the Duterte administration.  Let us fight for them. Let us not just wish them a Merry Christmas but more importantly, a Prosperous New Year!

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