A senior lawmaker said recent actions by President Ferdinand R. Marcos Jr. provided instant financial relief to ordinary consumers with directives designed to hold off scheduled increases this year in the cost of certain basic monthly expenses.
“We commend the President and his economic team for providing instant financial relief at the onset of 2023 to Filipino consumers continuously reeling from the mostly imported elevated inflation with the twin directives designed to keep at bay the impending price spirals in basic foodstuff like rice, corn and pork and the rate adjustment in the monthly premiums of PhilHealth [Philippine Health Insurance Corp.] members,” CamSur Rep. LRay F. Villafuerte said.
Marcos issued Executive Order (EO) 10 last December 29 extending for a year the temporary modification or reduced import tariff rates on pork meat (whether fresh, chilled or frozen), rice, corn and coal until December 31, 2023, to alleviate the impact of inflationary pressures resulting from the continued Ukraine-Russia crisis, expand supply sources, and reduce the cost of key commodities.
As endorsed by the Committee on Tariff and Related Matters (CTRM) of the National Economic and Development Authority, the issuance of the EO was approved by the Neda Board during its recent meeting presided over by Marcos, its chairman.
Villafuerte, who is also president of the National Unity Party, said that as pointed out after the meeting by Socioeconomic Planning Secretary Arsenio Balisacan, the lower tariff rates would enable the government to augment our domestic food supplies, diversify our sources of food staples, and temper inflationary pressures arising from supply constraints and rising international prices of production inputs due to external conflict.
EO 10
THE lawmaker said that inflation has generally remained on the high end of the curve since last year—even hitting 14-year highs in the last quarter. The increase is pinned on non-domestic factors such as spiraling petroleum prices in the world market, logistics jams or commodity supply disruptions largely caused by Russia’s invasion of Ukraine and the lingering Covid-19 pandemic.
EO 10 kept the reduced import duties at 15 percent (in-quota) and 25 percent (out-quota) for fresh, chilled or frozen swine meat; 5 percent (in-quota) and 15 percent (out-quota) for corn; 35 percent (both in-quota and out-quota) for rice; and zero for coal.
Under the EO, the original or higher import duties for pork meat, rice and corn shall return after December 31, 2023, while the zero rate on coal shall remain beyond end-December.
The pace of commodity price increases quickened to 8.1 percent last December—the fastest in 14 years since the 9.1 percent print in November 2008, and the ninth consecutive month that inflation breached the 2 percent-4 percent target range set by the Bangko Sentral ng Pilipinas.
The Philippine Statistics Authority traced the accelerated inflation to the 10.2 percent spike in the year-on-year prices of food items and non-alcoholic beverages.
Optimism
VILLAFUERTE expressed optimism that despite the economic challenges at the onset of 2023, the President and his economic managers could meet the country’s growth target of 6 percent to 7 percent for the full-year of 2023 amid positive tailwinds in the months ahead. The latter include increasing remittances from overseas Filipinos, receding global oil prices, easing of tight monetary policies and the projected reopening of China’s economy.
Malacañan Palace at the same time released through the Office of the President a memorandum signed by Executive Secretary Lucas P. Bersamin ordering PhilHealth to put off the scheduled increase this year in premiums to 4.5 percent (from the current 4 percent) and in income ceiling to P90,000 (from P80,000), as set in Republic Act (RA) 11223 or the Universal Health Care (UHC) Act.
In issuing this stay order, the Palace said in the memo that Marcos ordered PhilHealth to suspend the increases set by RA 11223 for 2023.
“in light of the prevailing socioeconomic challenges brought about by the Covid-19 pandemic, and to provide financial relief to our countrymen amidst these difficult times.”
The UHC law provided for annual increases in increments of 0.5 percent from the premium rate of 3 percent in 2020 until it reaches 5 percent in 2025.
Keep
VILLAFUERTE expressed confidence that the Marcos administration can keep the Philippines on high-growth mode in 2023 and onwards partly because of the President’s apt decision to sustain the unprecedented level of mega investments of the past administration in public infrastructure, “considering that infra spending has the highest multiplier effect on the economy.”
Citing a Department of Budget and Management report, Villafuerte said the Marcos government had allocated an amount equivalent to 5 percent to 6 percent of gross domestic product (GDP) to spending on infrastructure and other capital outlay projects.
Proof of the continued high infra spending under the Marcos administration was that completed infrastructure projects went up by 39.3 percent in September alone as National Government expenditures for this sector plus other capital outlay projects rose to P99.1 billion in September from the year-ago’s P71.2-billion disbursements.
Villafuerte said that, “The Chief Executive’s bold one-two move to issue EO 3 lifting the mandatory use of face masks outdoors and, later, EO 7 relaxing the masking mandate indoors along with easing the Covid-19 tests and other strict health protocols for inbound travellers had delivered the message that the Philippines was back in business after reopening its doors wide to tourists and investors alike.”
Estimates by the Neda and private analysts have put our GDP growth at 6 percent to 7 percent this year, on the back of sustained domestic consumption and investments.