Lawmaker: Address country's food issues to curb inflation

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Albay Rep. Joey Salceda said the government should flood markets with rice and increase investments in agriculture to curb inflation.

Metro Manila (CNN Philippines, September 6) — As prices of goods reach a nine-year high, a lawmaker said the government should prioritize solving its agricultural problems to help the economy. 

House Appropriations Committee Vice Chair Joey Salceda said the government should increase rice supply first as its prices are the top drivers of inflation. 

"Buhusan nila ng bigas. 'Yun naman talaga pinanggagalingan na ngayon eh," the Albay Representative  told CNN Philippines' Newsroom.

[Translation: Flood the markets with rice since that's where our problem really stems from.]


The country hit a 6.4 percent inflation rate in August this year, exceeding forecasts, with food prices rising to 8.5 percent. 

The Bangko Sentral ng Pilipinas said food supply shocks, particularly rice, pushed inflation beyond the acceptable range. 

Last month, Zamboanga City was placed under a state of calamity due to rice shortage. This was followed by a weevil or "bukbok" infestation which stalled the delivery of around 300 thousand sacks of imported rice. The government also imported 17,000 metric tons of "galunggong" or round scad due to a formaline scare. 

READ: Food, fuel costs hike August inflation to nine-year high

Salceda also reiterated his recommendation to lift tariffs on fish, meat, corn and vegetables, since they constitute 60 percent of the poor's consumption basket.

"A tariff on food is a tax on food, so why will you tax food?" Salceda questioned. 

Currently, shipments of meat and vegetables are subjected to a 40 percent tariff, while tariffs on fish range up to 10 percent.  


'Reap what you sow' 

The government has repeatedly blamed the global market price of fuel for the rise in prices. However, Salceda argued that the global market is out of their control.  

He suggested instead to redirect focus on policy adjustment and agricultural investments as a long-term solution to help the economy.

"The global prices are given, to a certain extent, and the peso is given, and our own domestic rice production shortages are given, so it's what you do about them that essentially shapes the direction of the national welfare, the inflation numbers, so if we did something, it will not be this high," he argued. 

Global fuel prices rose from 47 to 75 U.S. dollars per barrel since the beginning of the year, while the peso recently hit a 12-year low, depreciating from 49 to 53.55 pesos.   

READ: Stocks bleed out, peso slumps after inflation data

Salceda said he wants a budget of at least 25 billion pesos for the Department of Agriculture (DA), to invest in new and "easy-to-do" technologies to improve production. 

He cited the significant decrease in the DA's budget for the past ten years as the cause of the country's "supply difficulties."  

"In 2008, the budget of the DA was six percent of the total national budget. In 2014, our budget for DA has been lowered to two percent...The budget is the highest articulation of public policy so 'yan lumalabas po itong mga supply difficulty [supply difficulties are surfacing] because of this," he said. 

"You cannot harvest what you did not plant. Essentially, inflation, you will reap what you sow," he added.   


'Walang ginawa'

Salceda said the appropriations committee has been giving recommendations to the government since July to no effect. 

"Kasi kami naman July lang kami nagpanukala ng mga measures, and since then, walang nangyari, walang ginawa," he said.

[Translation: We have been giving suggestions in July and since then, nothing happened, nothing was done.] 

Vice President Leni Robredo also raised the need for the government to come up with "coherent solutions" to the inflation problem. 

"Instead of shutting down those who dare to point out its inefficiencies, may the administration finally rise to the challenge of putting forward coherent solutions to bring down rising prices," she said in a statement.  

Senator Nancy Binay expressed her fear that the current price trends will continue until 2019 and urged the government prioritize the economy.  

"'Pag ganito ang magiging trend hanggang next year, kailangan na ng gobyerno mag-refocus sa ekonomiya," Binay said in a statement. 

[Translation: I this is the trend until next year, the government needs to refocus on the economy] 

Meanwhile, Senator Joel Villanueva criticized the government's lack of concern on the effects of inflation.  

"The recent inflation figures show that our economic managers are obviously not on top of this issue. The economic managers do not seem to be serious in dealing with the problem," Villanueva said. 

Socioeconomic Secretary Ernesto Pernia earlier called the recent price hike "not alarming."