A dismal September with rising inflation?

IN a few more days, it will be September. In so many years in the past, September was welcomed as the beginning of the “ber” months associated with the Christmas season, the most welcome part of the year to Filipinos. This year, however, it is awaited with apprehension by many, for it is the final month of the third quarter of the year which Socioeconomic Planning Secretary Ernesto Pernia said will see the peak of inflation – rising prices – in the country.

Consumer prices have been steadily rising these past few months, with many blaming the TRAIN Law which imposed excise taxes on diesel and other fuels, while raising taxes on alcoholic drinks and sweetened beverages. Government economists insist the major reason for the inflation – 5.7 percent as of July, a five-year high – is not the TRAIN Law but rising global oil prices and a fall in the value of the Philippine peso. But the fact is that the combination of these factors have pushed prices to new heights. And Secretary Pernia sees them continuing to rise until the third quarter of the year.

For Filipinos, the key consumer item is rice, the national staple. The government imports hundreds of thousands of metric tons of rice every year just to keep prices down. Our own farmers are close to producing enough for the country’s needs but at costs much higher than in Vietnam and Thailand. So our National Food Authority (NFA) imports from these two countries, and NFA rice is made available everywhere in the country at about 140 per kilo, half the price of the best Philippine rice. The availability of cheap imported rice is expected to keep over-all rice prices steady.

Despite the recent importation, however, rice prices have continued to rise, the Philippine Statistics Authority reported last Tuesday the average retail price increased to 145.71 per kilo this month, up 9 percent from last year. The NFA said the recent imports have not had the desired effect of lowering overall prices. Secretary of Agriculture Emmanuel Piñol believes there is need to cut down on the tiers of middlemen and traders who control the food supply chain in the country.

Albay Rep. Joey Salceda fears inflation may go beyond 6 percent this month unless aggressive economic measures are carried out. He urged the NFA to import and distribute more rice at 127 a kilo, targetting poor communities. He also urged President Duterte to issue a directive to all regulatory agencies – those regulating water, energy, tolls, etc. – to defer approval of price adjustments.

There had been earlier reports that President Duterte will issue an executive order, after Congress goes on a break this week, to reduce tariffs on certain food imports. Some economists continue to blame the TRAIN Law’s imposition of tariffs on fuel where there was none before, but no official has raised this issue, as it would have a major effect on the government’s revenues.

There are so many proposals, all aimed at stopping the rising inflation which Secretary Pernia hopes will ease after September. But, of course, this is just a hope and there are those like Congressman Salceda, who fears inflation will rise beyond 6 percent.

We hope the many proposals to stop the inflation – especially as it affects food, particularly rice – will lead to specific action in the coming weeks. Or we will have not only a sad September but an entire dismal Christmas season this year.