House appropriations panel kicks off economic oversight hearing

The House committee on appropriations yesterday kicked off an oversight hearing to see how the lower chamber can work with the economic team of President Marcos to address the country’s economic woes.

According to House Speaker Martin Romualdez, the House wants to know how they can pursue the President’s “whole government approach” to keep the economy afloat despite the “global phenomenon” of rising inflation rates.

“We are here together to see how we can work hand-in-hand and we’d like to very much hear from our economic managers how we can engage and make sure that our functions here in the Congress would become more meaningful, more responsive to the needs of the Filipino people,” he said during the briefing of the Development Budget Coordination Committee (DBCC).

More ayuda

During the briefing, committee senior vice chair and Marikina Rep. Stella Quimbo called for the immediate distribution of cash aid or ayuda amid skyrocketing food prices which can result to 2.58 million more poor Filipinos.

Quimbo suggested that the potential P11.9-billion additional collection from value-added tax (VAT) from higher prices of goods in January can be used to help Filipinos cope with the high inflation.

She added that 10 percent food inflation rate will put 2.3 million more people into poverty, citing the estimates of the Asian Development Bank.

She added that higher prices, especially food prices, “pushes more people below the poverty line.”

“Food price increases was the biggest single source of inflation contributing 4.8 percentage points out of the total 8.7 inflation rate. This includes vegetables, meat, fish, eggs and sugar,” she maintained.

The lawmaker said if the 11.2 percent food inflation rate that the country is experiencing will continue, the number of poor Filipinos may reach 2.58 million this year.

Two tools

For his part, Bangko Sentral ng Pilipinas Governor Felipe Medalla said the government had employed two tools in dealing with inflation – sell dollars and raise interest rates.

“When you compare us with other countries, they more or less did the same. Sales of foreign exchange is a percentage of reserves,” he said.

According to Medalla, the country is “more or less a normal central bank” when it comes to selling dollars but it is higher than most Asian nations when it comes to increasing interest rates.

“You can say we’re a little more aggressive, at the same time, we have a longer history in the past of inflation getting out of control. My point is, central bank policy selling dollar and rising interest rates have been largely successful in limiting the second order effects (of inflation),” he added.