To slash poverty incidence, the Department of Finance is pushing for reforms in the rice sector, citing that high food prices make households poor.
“Food inflation needs to be tamed to avoid its adverse impact on poverty. High food inflation drives households back to poverty,” Department of Finance chief economist and Undersecretary Gil S. Beltran said in a research paper submitted to Finance Secretary Carlos G. Dominguez III.
Preserve the gains
In a statement Monday, the DOF said that among the conclusions of the research paper was that “food inflation worsens poverty,” hence “better food production and reforms in the rice sector are necessary to preserve the gains from rising incomes.”
According to the DOF study, “the rice sector, which accounts for a significant proportion of the consumer basket of the poor, should be reformed to make it contribute more effectively to poverty reduction.”
“Enhancing food supply through food production and timely importation, if natural disasters destroy the harvest, will go a long way in preserving the gains from good GDP (gross domestic product) growth and financial inclusion programs,” the DOF study pointed out.
Keep food prices low
Besides keeping food prices, in particular of rice, low, the study also pushed for sustained economic growth as well as remittance flows to accelerate poverty reduction.
“GDP real growth, wider fiscal space [through higher conditional cash transfers and infrastructure] and higher microfinance coverage contribute positively to poverty reduction,” the DOF study said.
Also, “higher overseas Filipino workers’ remittances lead to more micro-entrepreneurs and more lending to microenterprises, which contribute to poverty reduction,” the DOF study added.
The Duterte administration’s 10-point socioeconomic agenda aims to cut the Philippines’ poverty incidence to 14 percent by 2022 from 21.6 percent in 2015.