Profiteering, NFA mismanagement blamed for January inflation spike

More than the higher taxes slapped on consumption under the first tax reform package, profiteering by unscrupulous traders and mismanagement at the grains agency pushed inflation higher at the start of the year, the country’s chief economist said Monday.

During a hearing of the Senate committee on economic affairs, Socioeconomic Secretary Ernesto M. Pernia noted that the 4-percent headline inflation posted in January impacted on poor families as there was an “appreciable rise in the price of rice.”

Pernia, who heads the state planning agency National Economic and Development Authority, blamed “how rice stocks were handled” by the National Food Authority.

“The NFA seems to be in disarray, and we have to do something on how the NFA [maintains] this buffer so there’s no considerable spike in the price of rice,” Pernia said.

Signed by President Duterte in December, the TRAIN law starting Jan. 1 this year jacked up or slapped new excise taxes on oil, cigarettes, sugary drinks and vehicles, among other goods.

In the case of sugar-sweetened beverages, Pernia admitted that these were consumed by low-income households.

However, Pernia said that “certain retail merchants took advantage by raising prices prematurely. —BEN O. DE VERA