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By Ruth Abbey Gita and Keith A. Calayag, September 5 2018; SunStar
Image Credit to Flickr.com
PRESIDENTIAL Spokesperson Harry Roque Jr. on Wednesday, September 5, assured that the government is working to reduce the inflation rate, which soared to 6.4 percent in August.
“The administration is taking steps to address the challenges, particularly rising prices, faced by Filipino families,” Roque said in a statement.
“The President’s economic team continues to monitor inflation with vigilance as government takes action to assist the poor while keeping the macroeconomy stable,” he added.
The economic team – composed of the Department of Budget and Management, Department of Finance, and National Economic and Development Authority – has projected that the inflation would continue to accelerate before it would taper off towards the end of the year.
The soaring prices of goods have been blamed on the government’s tax reform package under the Tax Reform for Acceleration and Inclusion (Train) law, supply constraints and some external forces such as the fluctuating prices of oil.
House Speaker and former President Gloria Macapagal-Arroyo expressed confidence that the Duterte administration will be able to address the rising inflation.
“The government is doing what it can to address it. I have had a more alarming situation at 6.6 (percent) and I was able to resolve it in a few months time so there can be a solution,” Arroyo said in a separate interview.
She was referring to the 6.6 percent inflation rate logged in March 2009. Arroyo said her administration brought it down to 1.5 percent in three months.
Among the measures that her administration undertook then was the massive importation of rice.
“A lot of measures were taken. It’s a combination but the bigest factor was the massive importation of rice together with buying massively from the local farmers,” she said.
The former President said she will meet with Albay Rep. Joey Salceda to discuss what Congress can do to help the administration address the inflation spike.
She hoped that the inflation rate has peaked this year.
Salceda, an economist, said the August inflation rate at 6.4 percent is self-inflicted and is due to the fact that “the government did little or nothing.”
“We can no longer blame market opportunists profiteers and rice hoarders. The only notable measure we implemented in response was the 50-bps increase in policy rates of the Bangko Sentral ng Pilipinas (BSP) but it would take a lag of 6 to 18 months for monetary action to gain traction in containing aggregate demand,” said Salceda in a statement.
He blamed the soaring inflation on the following: supply difficulties due to two weeks of continuous rains especially in the Luzon food basket principally impacting vegetables; unabated increases in rice prices with weak NFA intervention; elevated meat prices; fish prices are still going higher; slight increases in pump prices due to peso weakness and higher global oil prices; and peso weakness from P53 in July to P53.40 in August (now P53.55 to US$1).
He said it is impossible for the country to reduce the inflation rate to 4 percent this year as Christmas is approaching.
“Unless we do nothing and do more silly things, 6.4 percent should already be the peak in this inflation cycle. But a return to 4 percent within 2018 is no longer possible especially we are now into the world’s longest Christmas season characterized by higher consumer spending,” he said.
Salceda said the 4 percent inflation will likely be achieved by August next year. (SunStar Philippines)