Put PH under Alert Level 1 to revive economy – NEDA

MANILA, Philippines — Putting the entire country under Alert Level 1 “at the soonest possible time” so that schools can resume in-person classes will help it offset the economic effects of the Russia-Ukraine war, Secretary Karl Kendrick Chua told President Rodrigo Duterte on Monday during the weekly taped “Talk to the People” briefing.

That was one of the 14 recommendations that Chua, who heads the National Economic and Development Authority (NEDA), made “to increase domestic economy and offset global risk.”

“While we cannot prevent the risk from coming from the global perspective, we can strengthen our domestic economy to provide the people with more jobs and opportunities,” he said.

Even before the Russia-Ukraine war broke out, the Philippine economy has been suffering under the effects of COVID-19 lockdowns for almost two years.

Another recommendation that Chua made was for the government to increase the fuel subsidy program for public utility vehicles (PUVs) from P2.5 billion to P5 billion and increase the fuel vouchers for farmers by increasing the budget from P500 million to P1.1 billion.

Metro Manila skyline at night (INQUIRER FILE PHOTO / JILSON SECKLER TIU)

“The first tranche will be given in March and the second in April,” he said.

Part of this recommendation is increasing the buffer stock of petroleum from the current 30 to 45 days, which will require a law.

Another law would be required to increase the buffer stock of LPG (liquefied petroleum gas) from 7 to 15 days.

“So when we expand the buffer stock, we can ensure more adequate supply and meet demand in case there is a global shortage, and this will require a new law,” Chua said.

Chua said that NEDA would submit a request for the issuance of an executive order for its proposals on tariff reductions, specifically on rice, corn, and pork.

“Only two [recommendations] will need laws. So we will prepare it immediately so that Congress can consider it immediately when they return on May 4 sessions,” he said. “If the situation escalates we could recommend a special session.”

At this point, Duterte invited the lawmakers to talk with his economic team.

“This is intended really for the welfare of the people. If you have time, sit with us and discuss them. Otherwise, you’re on your own. You’re disregarding what has already been studied by the outgoing administration,” Duterte said.

14 proposals

Following are the key points of the NEDA recommendations.

1. Overall economy

Shift the entire country to Alert Level 1 and open all schools for face-to-face learning to increase domestic economic activity and offset external risks.

2. Gasoline and diesel

Increase fuel subsidy program for PUV from P2.5 billion to P5 billion, with the first tranche to be given out in March and the second tranche in April.

Continue promotional discount of oil companies of P1 to P4 per liter for PUVs.

Increase the buffer stock from the current 30 to 45 days (law needed).

Provide additional fuel vouchers for agricultural producers by increasing the budget from P500 million to P1.1 billion, with the first tranche to be given out in March and the second tranche in April.

Promote energy conservation.

Suspend or remove pass-through fees in LGUs, industrial parks, and subdivisions.

Fully implement service contracting and expand it for all public transport routes.

Promote E-vehicles and expand charging stations.

Aggressively promote active transport, such as bicycles.

3. LPG

Increase buffer stock from the current 7 to 15 days minimum inventory (law needed).

4. Coal

Expand supply and reduce price by reducing the most favored nation (MFN) 7% tariff rate to zero until Dec 2022.

Maintain buffer stock at the current 30 days minimum Inventory.

5. Electricity

Promote energy conservation, including the use of sensor technologies for energy savings.

Stagger the increase in generation charge.

Allow foreign ownership of firms micro-grids.

Allow foreign ownership of firms in solar, wind, and tidal energy (revise IR of renewable energy act).

6. Overall support to agriculture

Implement the second part of the Plant Plant Plant program (subject to availability of funds).

Provide targeted fertilizer vouchers to farmers.

Expand supply through bilateral discussion with fertilizer-producing countries.

7. Rice

Department of Agriculture to closely monitor rice inflation and the National Food Authority  to closely monitor buffer stock.

Help local governments increase rice buffer stock with concessional loans from the Land Bank of the Philippines and the Development Bank of the Philippines,  particularly in the procurement of post-harvest facilities and warehouses.

Accelerate Rice Competitiveness Enhancement Fund (RCEF) implementation and other parts of the national rice production program to increase local production.

Facilitate continuous release of Sanitary and Phytosanitary (SPS) import clearance, especially for shipment arriving for the lean season starting July.

Expand supply and reduce prices by extending the MFN (most-favored nation) 35% tariff rate until December 2022.

8. Corn

Expand supply and reduce prices by lowering the MFN tariff to 5% in-quota and 15% out-quota with minimum access volume (MAV) of 4 million metric tons (MT) until Dec 2022.

Import more feed wheat and produce more cassava (as feeds substitute).

9. Pork

Expand supply and reduce price by extending the lower tariff of 15% in quota and 25% out quota with MAV of 200,000 MT until Dec 2022.

Accelerate release of imported pork from cold storage.

Pass the livestock and dairy bill.

Remove all non-tariff barriers.

10. Fish

Issue CNI for small pelagic fish (such as round scad, or alunggong) valid from Q2 to Q4 2022. It needs an additional 140,000 to fill up the projected supply gap of 200,000 MT.

Remove all non-tariff barriers.

11. Chicken

Accelerate the release of sanitary and phytosanitary (SPS) clearances from National Meat Inspection Service (NMIS) cold storage warehouses to push up inventory to pre-pandemic level.

12. Sugar

Address the temporary restraining order (TRO) on sugar imports.

Allow direct importation by industrial users: implement to 1:1 domestic-to-import ratio.

13. Wheat

Expand sources of wheat (e.g., India)

Support Pinoy Tasty Project.

Promote non-wheat flour substitutes such as Sagip-nutri flour (made from cassava, sweet potato, monggo, etc), and banana flour.

14. Strategic investment priority plan (SIPP)

Reiterate the inclusion of renewable energy and agriculture in the draft SIPP.

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