Marcos needs more powers vs inflation–Salceda

Rep. Joey Sarte Salceda

ALBAY Rep. Joey Sarte Salceda is asking the next leadership of the House of Representatives to grant President Ferdinand R. Marcos Jr. a significant number of special powers to curtail price increases.

Salceda issued his statement after June’s year-on-year inflation rate was recorded at 6.1 percent—the highest since November 2018, “with very few indications of going down in the coming months.”

The lawmaker explained that while the drivers of inflation “are largely external” and, “therefore, mostly out of our local control,” the Marcos administration can adopt policies that can prevent the situation from getting any worse.”

Salceda said food and non-alcoholic beverages were the main drivers for June’s inflation print, which significantly accelerated from 5.1 percent in May. The commodities posted a 6-percent increase in June from the 4.9 percent in the previous month.

Citing data from government statisticians, Salceda said the transport index grew significantly, at 17.1 percent annually, from 14.6 percent in May.  Housing, water, electricity, gas and other fuels also grew by 6.6 percent.

Thus, the three main concerns remain food—and, therefore, agriculture; transport and energy, according to the lawmaker.

More power

ACCORDING to Salceda, he has already submitted to the incoming Speaker, Rep. Ferdinand Martin G. Romualdez, a proposal for a “Bayan Bangon Muli” (country rise again) package that integrates a significant number of special powers to curtail price increases.

He said it’s “short of price controls, which would of course be more harmful than do any good for supply stability.”

Salceda proposed to include in the package powers: against anti-hoarding; to incentivize production; to provide loans and guarantees to suppliers of essential goods; against price-gouging; (motu proprio) to investigate market abuse; transport emergency; and, to mobilize uniformed personnel to expedite programs and projects.

Under his proposal, the Rise Again bill will have a validity of 18 months.

Salceda said that within that period, “the President can invoke certain powers, the duration of which he can decide, as long as it falls within those 18 months.”

The lawmaker said that under anti-hoarding powers, no person shall accumulate in excess of the reasonable demands of business, personal, or home consumption, or for the purpose of resale at prices in excess of prevailing market prices, goods or services that have been designated by the President as scarce materials.

‘Not a price cap’

SALCEDA said that under powers to incentivize production, the President may provide appropriate incentives to develop, maintain, modernize, restore and expand the productive capacities of domestic sources for critical components, critical technology items, materials and industrial resources essential for price and supply stabilization.

Powers to provide loans and guarantees to suppliers of essential goods must also be included, said the lawmaker.

According to Salceda, it shall be unlawful under the anti-price gouging powers  to sell essential goods at “unconscionably excessive” prices.

“This is not a price cap,” he added. “So it will still allow suppliers the incentive to supply but will not allow taking undue advantage of constrained supply conditions.”

Salceda also included motu proprio powers of the Department of Energy (DOE), the Philippine Competition Commission and the Department of Trade and Industry to investigate for possible market abuse in the energy and essential goods sectors.

The lawmaker said the transport emergency powers will empower the President to make use of private roads, expedite public projects, conduct alternative working arrangements and temporarily control facilities around ports and airports to address supply bottlenecks.

Supporting MSMEs

THE proposed Country, Rise Again bill also includes a power to mobilize uniformed personnel to expedite programs and projects.

“This will allow the President to use units of the military and the uniformed services, such as AFP [Armed Forces of the Philippines] engineers, members of the Bureau of Fire Protection, the Philippine Coast Guard and others to expedite the completion of infrastructure projects, or to ease transport bottlenecks,” he said. “What comes to mind is road repairs near and around ports, which can cause traffic, higher logistics costs and supply delays.”

Salceda said he also proposed integrating agriculture and food security in government training programs, expanding the farmer assistance programs and mechanisms of the Department of Agriculture (DA) to manage food surpluses, “so we do not throw food away when we produce more of it and instead save them for future use.”

Meanwhile, the lawmaker also proposed means to expand supply through assistance to micro-scale, small-scale and medium-scale enterprises (MSMEs).

“We hope to make it easier for MSMEs supplying critical goods to register and set-up shop, by reducing documentary and administrative requirements, most irritatingly including now-useless requirements such as the cedula.”

Salceda said the President may also require a minimum petroleum inventory and have petroleum companies explain significant price changes during the effectivity of the proposal.

First do-no-harm

ACCORDING to Salceda, “while the causes of inflation remain largely external, the government must ensure a first-do-no-harm policy.”

He explained the policy means interventions must remain market-oriented and government efforts must be focused on increasing constrained supply rather than manipulating prices.

“On the price side, high prices per se may not necessarily be unjust,” the lawmaker said. “So we have to have price abuse-prevention mechanisms, instead of brute-force price ceilings.”

Meanwhile, Salceda said he remains “very skeptical” that any rate hike by the Bangko Sentral ng Pilipinas (BSP) Monetary Board will have significant transmission in prices.

“If anything, hikes are more likely, at this point, to cut growth. After all, we did not splurge on our stimulus,” he explained. “And liquidity growth, at around 7 percent, is still below real economy output growth of around 8.3 percent last quarter.”

Salceda proposed instead a policy of directing lending towards supply-enhancing or supply-expanding sectors, such as agriculture, transport and energy.

“Coordinated efforts between the fiscal authorities and the BSP, as well as the sectoral departments such as DA, DOE and DOTr [Department of Transportation], will be crucial in this regard.”

The lawmaker said he will be working with officials of these department on this.

“As well, once Congress finalizes its officers and committee mandates are made known,” Salceda added.

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