Bring down inflation to 4%

Salceda: Without aggressive economic measures, inflation may peak beyond 6%

Albay Rep. Joey Salceda on Monday called on the government to bring inflation back to the 4-percent zone, noting that inflation may likely peak beyond 6 percent this month without aggressive economic measures.

“There is little time for debate. This decision puts greater pressure on other measures to arrest the momentum, to prevent a wage-price spiral, and bring inflation back to low-4 percent zone,”Salceda said.

Bringing down inflation is one of the alternative solutions cited by Salceda to curb inflation after

the multi-government Committee on Tariff and Related Matters (CTRM) rejected the proposal to lower tariff rates on certain food imports.

Salceda also urged President Duterte to issue a directive to all supervising regulatory agencies –such as the water regulator, Toll Regulatory Board, and Energy Regulatory Commission – to defer approval or suspend implementation of regulated price adjustments.

The Albay lawmaker likewise called on the National Food Authority (NFA) to import more, distribute the 127 per kilogram rice more aggressively, and target poor communities.

He said “greater pressure” is on the Bangko Sentral ng Pilipinas (BSP) “for more tightening” of its monetary policy “to curtail aggregate demand which may jeopardize growth targets further down the road.”

Salceda stressed that it was food inflation of 7.1 percent that drove the 5.7 percent headline inflation in July.

He said among the food items, fish contributed 0.7 pts; meat, 0.4 pts; and vegetables, 0.4 pts to the headline inflation. “Alone or together, they are certainly not small.”

But Malacañang clarified that no one in the Cabinet has endorsed the suggestion to impose zero tariff on some agriculture products. These food items include feed wheat, corn, vegetables, and fish.

Salceda noted that reducing tariff barriers would “shift the supply curve to the right” so that existing players will “behave reasonably competitive” in pricing their products at the risk of new players.

It was earlier reported that President Duterte would issue an executive order, reducing tariffs on certain food imports as Congress goes on a break this week.

The recommendation to reduce tariffs on these imported products was among the counter-inflation measures proposed by Speaker Gloria Macapagal Arroyo to Duterte's economic team.

The inflation rate hit a five-year high at 5.7 percent in July due to the rise in the prices of food and nonalcoholic beverages, according to the Philippine Statistics Authority