AN economist-lawmaker on Thursday recommended to President Ferdinand Marcos Jr. a series of executive orders to respond to higher prices.
House Committee Ways and Means Chairman Joey Sarte Salceda made the recommendation as September 2022 figures showed that inflation accelerated to 6.9 percent.
In a memorandum for the President, titled “Food, Feed, and Fuel: Analysis and Recommendations on the September 2022 Inflation Rate,” Salceda recommended that Marcos issue a string of Executive actions to ensure that price growth is contained.
“The problem is primarily in food, feed, especially corn, and fuel. These are the most essential components of the basket of goods. And they are vulnerable, to some extent, to global price volatility due to imports,” he said.
“Food (around 25 percent), fuel (up to 90 percent in net imports), and feed (around 21 percent for corn). Rising USD/PHP exchange rates (which this representation has projected to go as high as P65-86/USD before it settles and gradually declines over the next 12-24 months), continuing recovery of global demand, higher input costs (fertilizers and fuel) and supply constraints due to global climate conditions remain threats to both availability and affordability of the country’s food, feed, and fuel supply,” Salceda warned.
Ceteris paribus, Salceda projected that every 1 percent increase in USD/PHP prices translates to between 0.1 and 0.4-percent increase in overall prices, depending on the overall import mix.
“This can be offset by lower overall domestic prices—which makes a surplus and lower costs of domestic food production, as well as an adequate supply of indigenous energy critical,” he said.
Salceda also warned that higher prices could lead to smuggling, and pointed out the need for better inter-island transport linkages.
“Higher domestic prices in Mindanao will raise the incentive to intensify the use of traditional “Southern backdoor” smuggling mechanisms. Based on this representation’s discussions with officials of the Bureau of Customs, the items suspected to be most susceptible to smuggling are tobacco products, fuel, and vegetables,” Salceda wrote.
“Higher prices in Visayas continue to highlight vulnerabilities in inter-island transport, especially as food prices remain significantly above the national average in Visayas (9.2 percent inflation in Western Visayas, 9.8 percent in Central Visayas, and 7.7 percent in Eastern Visayas, versus the national food inflation of 7.4 percent),” he added.
On food, Salceda suggested that the President issue an EO directing the inventory and release of all procured and available financial and material resources for agriculture, as well as expeditious completion of all pending procurement for agriculture.
An EO ensuring that all supply bottlenecks for food and other farm producers are eased may also be issued, he said.
According to Salceda, administrative orders directing Local Government Units to lift all hindrances and blockages across farm-to-market routes; and directing the Department of Transportation to ensure the proper flow of traffic feeding into interisland nautical routes may also be issued.
He suggested an EO directing that all schools and barangays undertake community edible gardening programs, while conducting food processing and storage training for farmers to manage food surpluses.
He sought the revival of the vermiculture for animal feed under the late President Ferdinand E. Marcos, the incumbent’s father.
On feeds and imported products, Salceda suggested reducing tariffs for imported corn to 5 percent (or raise minimum access volume) and increasing the current 150,000 MT import program for refined sugar, but under an auction system to reduce price differential and generate revenues for domestic sugar sector support.
On fuel and indigenous energy sources, the lawmaker said the government should ensure that hydropower dams can optimally produce through desilting.
He said the government also needs to increase the production of domestic coal and is considering the temporary or managed relaxation of the Department of Energy (DOE) moratorium on the expansion of power plants employing domestic coal.
Salceda also called for the issuance of an Executive Order expediting the local and national approval of permits for solar, wind, and other renewable energy projects and issuance of amendments to Implementing Rules and Regulation of RA 9513 of the Renewable Energy Law to lift foreign ownership restrictions to renewable energy generation.