THE Economic Development Cluster (EDC) has submitted to the President a draft executive order (EO) that removes nontariff barriers (NTBs) on food items to temper inflation, which surged to a nine-year high in August.
The National Economic and Development Authority (Neda) said the EO will focus on fish, rice, sugar, meat and vegetables, which have been considered as the major contributors to inflation in the past two months.
The Neda added that fish and seafood, rice and meat, and vegetables accounted for 2.4 percentage points of the 6.4-percent inflation rate in August.
“The issuance of the executive order, as well as quick implementation of immediate and short-term measures, will address the supply issues that have been driving up inflation,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
The removal of the NTBs, including administrative barriers, can help speed up the entry of imported food items into the country’s borders. The proposed EO will take off from the measures and reforms identified by the EDC to tame food inflation.
Immediate to short-term measures include making rice available in the market through immediate release of stocks from National Food Authority warehouses, importation and distribution of projected harvest; monitoring of rice transfer from ports to warehouses and retail outlets; and the speedy passage of the rice tariffication bill.
Availability of fish and chicken will be increased by allowing imports to be distributed quickly and by setting up public markets with cold storage facilities where producers can sell directly to end consumers.
Apart from importation, improving logistics, transport, distribution and storage was also deemed crucial for arresting the increase in the price of sugar, vegetables and other food items.
Medium- to long-term measures include boosting agricultural production by promoting the use of and developing resilient and high-yielding varieties of crops while reassessing the country’s planting season and crop viability in each region.
Policy measures include the review and possible amendment of the Fisheries Code and other policies governing the sector.
The EDC reiterated the urgency of passing the rice tariffication bill, which is currently in the Senate after approval by the House of Representatives on its third and final reading.
“The rice tariffication bill must be passed with haste not only to curb inflation but also to provide farmers better access to farming technologies. This will increase productivity and supply in the medium-term,” the EDC added.
Poverty reduction
Earlier, local economists believe more expensive commodities would make it more difficult for the government to meet its target of reducing poverty to 14 percent by 2022, from the 21.6 percent recorded in 2015.
University of the Philippines School of Statistics Dean Dennis Mapa said urban and rural poor households, as well as near-poor households, are negatively affected because food inflation rates are high for Metro Manila at an eight-month average of 6.7 percent and areas outside the National Capital Region with 5.9 percent.
This is consistent with the findings of a 2008 study of Asian Development Bank economist Hyun Son, stating that a 10-percent increase in prices of food could lead to 2.3 million poor Filipinos while the same increase in nonfood prices could lead to an addition of 1.7 million to poverty.
Son also said that a 10-percent increase in rice and fuel prices will swell the ranks of the Filipino poor by 660,000 and 160,000, respectively.