Neda wants food importation fast-tracked
Acknowledging that consumer price hikes in the Philippines have been the fastest in the Association of Southeast Asian Nations (Asean)-5 and badly hurting poor Filipinos, state planning agency National Economic and Development Authority (Neda) is pushing to fast-track food importation and nationwide distribution of agricultural goods.In a report on Thursday, Neda said easing fish importation might be considered moving forward to arrest high food prices.
“In the medium term, the government may need to explore the possibility of further liberalizing other sectors of the economy to lower domestic prices while at the same time promoting competitiveness of local producers. The DA (Department of Agriculture) and DTI (the Department of Trade and Industry) will be looking into the concerns raised on fish import restrictions. This needs a careful balancing act from the government,” Neda said.
Fish prices rose 3.7 percent in January, contributing to the elevated food inflation mainly caused by pork and vegetables.
Neda noted that in 2020, the average headline inflation rate of 2.6 percent was higher than Indonesia’s 2 percent. Meanwhile, lower consumer prices were posted in Malaysia, Singapore and Thailand last year.
In January, the rate of increase in prices of basic commodities in the Philippines already breached the 2-4 percent target range as it climbed to a two-year high of 4.2 percent year-on-year, again much faster than Indonesia’s 1.6 percent.
“The government needs to urgently address the uptrend in the country’s inflation, which is currently the highest among Asean-5 economies. In particular, addressing the increase in food prices is crucial as this affects the purchasing power of poor households the most,” Neda said.
“Maintaining low and stable inflation rate for basic goods and services is very important given that both households and firms are facing financial difficulties because of the pandemic,” it added.
During the previous elevated inflation episode in 2018, rising household incomes amid sustained economic growth eased the pain inflicted by higher consumer prices. But at present, the economy still reeled from a prolonged pandemic-induced recession which shed millions of jobs and shut down thousands of businesses.
Last month, inflation among families belonging to the bottom 30-percent income households jumped faster than the headline rate and also hit a two-year high of 4.9 percent, which meant they shelled out more money, especially for food, despite the harder times.
“In this regard, the government needs to speed up its supply augmentation measures to address the shortage and stabilize the retail prices of key agricultural commodities affected by the continued presence of African swine fever, the ongoing La Niña phenomenon, and the lingering effects of the typhoons last year,” Neda said. —BEN O. DE VERA
