THE government is already doing its utmost in terms of implementing economic policy to cushion the impact of high commodity prices on the lives and livelihoods of Filipinos, according to the National Economic and Development Authority (Neda).
On Tuesday, the Philippine Statistics Authority (PSA) reported that inflation averaged 4 percent in March this year, higher than the 3 percent posted in February, but slower than the 4.1 percent in March 2021. The average inflation for the first quarter reached 3.4 percent. PSA data showed the inflation owed to increases in costs of food, fuel and utilities.
In an interview with BusinessMirror on the sidelines of the Philippine Economic Briefing, Neda Undersecretary for Policy and Planning Rosemarie G. Edillon said since the crisis is temporary, it is not advisable for the government to implement measures that could have a more permanent impact on the economy.
“First, we think this crisis is temporary so we don’t need to bring in solutions that will have cascading effects down the road, [that could lead to] more permanent adverse effects and so we only need temporary solutions right now,” Edillon said.
“Of course, we still think the more robust solution is to really improve our energy security. That’s where our vulnerability lies but right now, since that will take time to happen, we just want to
cushion [the impact] on the ones who will be hit the most,” she explained.
Steps to combat inflation, the Neda said, included expanding supply and reducing prices of pork by extending the lower tariff of 15 percent in quota and 25 percent out quota with minimum access volume of 200,000 metric tons until December 2022.
The Neda said the measures also included accelerating the release of imported pork from cold storages and passing the proposed Livestock Development and Competitiveness Law and pursuing the livestock value chain reform to address rising corn and feed prices.
The government also worked to accelerate the release of Sanitary and Phytosanitary Import Clearance from the National Meat Inspection Service’s cold storage warehouses to push up chicken inventory and removed all non-tariff barriers.
Socioeconomic Planning Secretary Karl Chua said that over 158,000 corn farmers and fisherfolk registered under the Registry System for Basic Sectors in Agriculture are also set to receive P3,000 as fuel subsidy.
The Neda chief added that to cushion the impact of rising prices, the government will distribute unconditional cash transfers worth P500 per month to the poorest 50 percent of households.
Moreover, around 115,000 public utility vehicle drivers and operators have received P6,500 each under the Pantawid Pasada program. However, this initiative has hit a snag after transport agencies stopped disbursements for fear of running afoul on the Comelec ban on spending during the campaign season.
“The government stands ready to support consumers, commuters, public transport drivers and operators, and agricultural producers to ease the impact of high oil and commodity prices,” Chua said.
“As Covid-19 cases subside, we also aim to move the entire country to alert level 1 to provide more opportunities for Filipinos to earn and provide for their families amid inflationary pressures,” he added.
Higher prices
Based on PSA data, the main sources of higher inflation were food and non-alcoholic beverages which averaged 2.6 percent in March. The increase in prices of food and non-alcoholic beverages accounted for 53.5 percent of the uptick in inflation.
Under this commodity group, the main sources of the increase were the prices of meat and others, rising 2.9 percent in March; fish and other seafood, 4.3 percent; and vegetables and tubers, etc. which increased to -0.1 percent.
The PSA data also showed food inflation alone posted inflation of 2.8 percent in March; while Cereals and Cereal Products, 3.4 percent. Under this, corn inflation averaged 31.3 percent during the period and Flour, Bread and Other Bakery Products, Pasta Products, and Other Cereals averaged 3.6 percent.
Inflation for other food items like oils and fats also increased 9.1 percent while sugar, confectionary and desserts also increased to 6.2 percent.
Apart from food and non-alcoholic beverages, the inflation for housing, water, electricity, gas, and other fuels increased to 6.2 percent. This accounted for 30.3 percent of the increase in inflation.
PSA said inflation posted by electricity prices averaged 18 percent while Liquefied petroleum gas (LPG) prices surged 26.5 percent.
The data also showed that transport accounted for 13.7 percent of the increase in inflation for the month of March. The commodity group saw prices increase 10.3 percent, the highest since May 2021 when inflation for this group averaged 16.2 percent.
Under this commodity group, gasoline prices surged 36.7 percent while diesel prices skyrocketed by 58 percent in March 2022.
Meanwhile, following the trend at the national level, inflation in the National Capital Region rose to 3.4 percent in March 2022, from 1.9 percent in the previous month. In March 2021, inflation in the area was reported at 2.5 percent.
The higher inflation in NCR was brought about by the uptick in the inflation of food and non-alcoholic beverages at 1.5 percent, from -1.6 percent in February 2022.
Similar to the trend at the national level and in NCR, inflation in Areas Outside NCR rose to 4.1 percent in March 2022, from 3.4 percent in February 2022. In March 2021, inflation in the area was posted at 4.6 percent.
The higher inflation in the area was brought about by the increase in the inflation for food and non-alcoholic beverages at 2.8 percent, and housing water, electricity, gas and other fuels, at 6.7 percent.
Image credits: Nonie Reyes