Biz leaders offer solutions to reduce inflation
If not acted on immediately, the rising prices of basic commodities may trigger social unrest, another problem the government may want to avoid.
Regional data of the Philippine Statistics Authority (PSA) for August showed that the inflation rate in Central Visayas is at 6.3 percent from 6.5 percent in the previous month.
The country’s current inflation rate stood at 6.4 percent. Year-to-date inflation is at 4.8 percent.
Business leaders said the continued rise in inflation, especially on food products, becomes a double burden to the lower segment of society where food accounts for more than half of their expenditures.
While they understood that the country’s rising inflation is a combination of a lot of factors, they said the government must begin looking for solutions immediately to taper it off; otherwise, the investors will begin looking away from the country.
“Fortunately, the biggest factor affecting our inflation rate now is directly under the management and control of our government,” said Cebu Chamber of Commerce and Industry president Antonio Chiu.
He is referring to the high prices of food, particularly rice, which is under the Department of Agriculture and the National Food Authority (NFA).
Chiu said the situation is grossly mismanaged because of incompetence or corruption.
“The short-term solution requires presidential action and the long-term solution is to get rid of NFA through an act of Congress because they have completely failed in their mandate,” he said.
Chiu explained that the prevailing high prices of rice are happening at a time when rice is abundant in the world market at a relatively cheap price.
“This is the reason our food situation is now alarming and will cause social unrest if not addressed immediately,” he said.
Cebu Business Club president Gordon Alan Joseph suggested that free importation of rice and other critical food products be allowed.
“This increasing inflation is very worrying not just for business but for all Filipinos and investors. This is a sign of flaws in our economic policies,” he said.
Joseph also called for the postponement and review of the Train 2 package and the removal of the excise tax increase on fuel.
Steven Yu, vice president of Mandaue Chamber of Commerce and Industry (MCCI), said the government should resolve with urgency the rice crisis situation by making affordable rice stocks available in the market within September or soonest.
Yu believes that consumers should be able to access these cheaper rice stocks conveniently.
Yu also wants the government to revisit the need to increase the paid leaves of employees vis-a-vis its effect on costs of doing business and productivity.
“We wonder why they have to increase the sick leave to 10 days and maternity leave to 100 days when we have so many holidays in the Philippines,” he said.
For MCCI president Stanley Go, there is no one-size-fits-all solution to address the high inflation problem because it should be a long-term solution that the government must invest in.
“It is high time that we should take food security seriously,” he said.
Inflation is the rate at which the general level of prices of goods and services is rising. It impacts on household income and spending. Inflation that falls within target normally is a result of a stable economy and proper monetary policy.