Gov’t doing best to rein in inflation: DOF

October 4, 2018

The Duterte administration is doing its best to tame inflation with an array of measures now in place to streamline imports of agricultural goods and speed up the delivery of food items to the retail market in order to check rising commodity prices, Finance Secretary Carlos Dominguez III said Thursday.

Among these measures is Administrative Order No. 13 signed by President Duterte last Sept. 21 to remove non-tariff barriers and administrative restrictions on the importation of agricultural products.

“We have addressed that (inflation). The President has instructed all the agencies that regulate importation of food items to loosen the non-tariff barriers and move ahead,” Dominguez said in a media interview.

In AO 13, Duterte said "non-tariff barriers and certain administrative constraints, procedures, and fees unduly add to the costs of importation and limit supply, which in turn push up the prices of agricultural commodities to the detriment of Filipino consumers, especially the poor."

Duterte also issued Memorandum Order (MO) 26 directing the Department of Agriculture (DA) and the Department of Trade and Industry (DTI) to implement measures to reduce the gap between the farmgate and retail prices of agricultural products.

MO 27 has ordered the DA, Department of the Interior and Local Government (DILG), Philippine National Police (PNP), and the Metropolitan Development Authority (MMDA) to “adopt measures to ensure the efficient and seamless delivery” of imported agricultural and fishery products from ports to markets.

MO 28 directs the National Food Authority to immediately release existing rice stocks in its warehouses.

“People have been asking us to impose price controls but, we don't believe in that kind of approach. If you impose price controls, the items will just disappear from the market. So we're addressing it by increasing supply,” Dominguez said.

In a separate media interview, Dominguez said the spike  in crude oil prices by 50 percent, the adjustments to the normalization of interest rates by the US Federal Reserve,  global trade tensions,  and supply issues  caused by weather-related events,  have all contributed to the elevated inflation rate of 6.4 percent in August.

He said to some extent, rising demand as a result  of more jobs created and lower income tax rates for individual taxpayers has also been an inflation driver.

“Right now, we are obviously experiencing headwinds as most countries are, including India and Indonesia. I think nobody is immune to these headwinds that we are experiencing,” Dominguez said in the interview.

“We are experiencing the headwinds but I think we are tackling them both from the monetary policy side as well as from the administrative side,” he added.

The directives issued by Duterte form part of the measures unveiled in early  September by the Economic Development Cluster (EDC) of the Cabinet to help rein in inflation.

The other measures include the  DTI, NFA, PNP, National Bureau of Investigation (NBI), and farmers’  groups forming monitoring teams to closely watch over the transport of rice from ports to NFA warehouses and retail outlets; the DA replicating the issuance of certificates of necessity to allow fish imports to be distributed in Metro Manila’s wet markets and other markets of the country; reducing  the gap between the farmgate and retail prices of chicken by setting  up public markets where producers can sell directly to consumers;  the Sugar Regulatory Administration opening sugar imports to direct users; and the Bureau of Customs prioritizing  the release of essential food items in the ports. DMS