“It could hit six percent or even beyond without vigorous counter-inflation measures,”

Salceda told “The Chiefs” show on Cignal TV’s One News channel.
Edd Gumban
‘Inflation may hit 6% without interventions’ - Joey Salceda
Jess Diaz (The Philippine Star) - August 11, 2018 - 12:00am

MANILA, Philippines — Inflation or the rate of increase in the prices of goods and
services could reach a new record high this month if the government does nothing
drastic to keep it in check, Albay Rep. Joey Salceda warned yesterday.

“It could hit six percent or even beyond without vigorous counter-inflation measures,”
Salceda told “The Chiefs” show on Cignal TV’s One News channel.

Inflation reached 5.7 percent in July from 5.2 percent in June.

He said consumer prices have been steadily rising since January, when the
government imposed new and higher taxes under the controversial Tax Reform for
Acceleration and Inclusion (TRAIN) law.

“There is persisting inflationary pressure within the system. We should really be

crying wolf. This is the first near-crisis for the Duterte administration. Our worry
really is a spiral,” he said.

Salceda pointed out that the inability of domestic producers to meet demand is the
reason why Speaker Gloria Macapagal-Arroyo and other leaders of the House of
Representatives proposed zero tariff on certain products to allow the private sector to
bring in supply.

 The zero-tariff list proposed by the House originally covered meat, fish, corn, feed
wheat and vegetables before it was narrowed down to only corn and feed wheat.

Salceda, an economist, said higher inflation would produce “more poor and more
hungry Filipinos.”

Another economist in the House, Rep. Michael Romero of party-list 1-Pacman, said a
six-percent inflation rate would take away P300 from a poor household with an
income of P5,000 a month.

“That means that this family’s P5,000 is worth only P4,700 due to higher consumer
prices. It could make do with its reduced purchasing power by buying fewer goods,
which means less rice and food on the table,” he said.
He said if this household receives a subsidy of P200 under TRAIN, its net loss is
P100.

Romero added that this is the reason why he is proposing that the TRAIN subsidy to
10 million households be increased to P500 “to allow poor families to cope with
inflation and the depreciation in the value of the peso.”

Finance Undersecretary Karl Chua has told the House ways and means committee that
total collections under the tax reform law would reach P285 billion this year, while
the revenue loss from lower individual income tax is estimated at P140 billion, for a
net gain of P145 billion.

Critics have blamed inflation largely on new and higher taxes imposed under TRAIN
starting in January. Last month’s rate was the highest in more than five years.

As the House of Representatives prepares to approve on third and final reading the
rice tariffication bill before next week’s recess, senators warned Malacañang that
setting tariffs on basic agricultural products should only be a temporary measure.

Sen. Sherwin Gatchalian, chairman of the Senate committee on economic affairs, said
the surge in inflation is largely due to the rising prices of commodities.

“And the reason for the rising prices in food commodities is due to the imbalance in
supply and demand,” he said.

Sen. Francis Pangilinan said he is inclined to support such a move but warned against
reducing tariffs to zero.

“They said it’s a temporary measure and yes, prices will go down but I’m concerned if
they’re going to make it zero,” Pangilinan said.

“There will be more imported produce but our farmers will not be able to recover
because they can’t compete price-wise, so it’s really a difficult balance,” he said.

Under the rice tariffication bill, volume restrictions on rice imports would be replaced
with 40-percent tariff. Duties collected from the importation of rice would go to a rice
competitiveness enhancement fund to be used to assist farmers.

Rep. Jose Panganiban Jr. of party-list ANAC-IP, agriculture committee chairman, is

the principal author and sponsor of the bill.
Camarines Sur Rep. Luis Raymund Villafuerte, a co-author, said the proposed law
“will not only pull down the price of rice by as much as P7 per kilo but also set up a
huge support fund that will enable palay growers to increase their harvests while
reducing their production costs.”

Majority Leader Rolando Andaya Jr. said safety nets for farmers “should be advanced
instead of waiting for them to be funded by income from the duties on rice to be
imported.”

Meanwhile, stakeholders have agreed to impose a five-percent duty on fish imports to

help curb inflation while the Department of Agriculture (DA) is set to scrap unutilized
import permits on pork and chicken. –  Paolo Romero, Marvin Sy, Louise Maureen
Simeon