FILE PHOTO: Albay 2nd District Rep. Joey Salceda
MANILA, Philippines — Albay 2nd District Rep. Joey Salceda has maintained that there is no other way to solve the rising inflation rates, which jumped to 8.0 percent for November 2022, but to ensure adequate supply of food products, feed for animals, and fuel.
Salceda, an economist by profession, said in a statement on Tuesday that the country is on-track to meet his predictions of a 8.5 percent headline inflation rate for 2022 and an annual average of around 6.0 percent.
According to the lawmaker, inflation continued to increase even with the Bangko Sentral ng Pilipinas hiking interest rates to meet the US Federal Reserve actions — an indication that there would really be no substitute to supply solutions.
“As I emphasized in August, inflation could peak to 8.5% this year and end up with an annual average of 6%. We are on track to meet that number,” Salceda said, after the Philippine Statistics Authority (PSA) made the announcement earlier.
“As I also emphasized then, the problem is food, feed, and fuel. That remains the case now. Even as the Bangko Sentral ng Pilipinas has already hiked rates to meet the US Fed’s actions, that is no substitute for supply solutions, especially since we are an economy in rapid recovery momentum,” he added.
Salceda also highlighted that adequate supply is key to bringing down prices of goods, as food expenditures are still the primary driver of high inflation rates. In the PSA report earlier, it was mentioned that the 8.0 percent inflation rate in November — highest in 14 years — was largely due to the higher prices of food and non-alcoholic beverages, which rose by 10.0 percent.
“The primary driver of high inflation remains food prices, which have increased by 10% year-on-year. That is in part due to our rigid food trade regime in crops in short supply, such as sugar and onions. We already know what happens when we open up our food markets: Because of rice tariffication, rice inflation is the lowest among all major food items in the CPI,” he said.
“We need to reconsider ways to protect our farmers in ways other than strict protectionism in our agricultural trade regime. The 38% year-on-year inflation in sugar can no longer be justified by protecting the local sector, which is heavily unequal on its own,” he added.
READ: Philippine inflation leaps to 14-year high in November
Despite the high inflation rate, Salceda said there are ways that President Ferdinand Marcos Jr. and his economic team can address the issue. As an example, the lawmaker said that the Department of Transportation can be tasked to manage traffic more efficiently, as almost half of food product prices come from logistic costs — or expenses incurred during delivery and transfer of goods.
“There is an abundance of tools available to the President and his economic team to combat inflation. Immediate executive action may still take time to actually address fundamental drivers of inflation, but would be proper signaling for the public and private sectors. Inflation remains the toughest economic storm we must weather, and our ships must sail in the same direction,” he said.
“The role of logistics and transport costs in food prices can be addressed. I recommend that President Marcos issue an executive order ensuring that all supply bottlenecks for food and other farm producer are eased. Local Government Units may be directed to lift all hindrances and blockages across farm-to-market routes,” he added.