The Department of Finance (DOF) has pointed out the need to ease “protective barriers” to provide for more competition, amid the increase in the general price level.
In its economic bulletin released over the weekend, the DOF highlighted that the inflation rate accelerated to 4.66 percent year-on-year in February, up from the 4.24 percent hike the prior month and more than twice the 2.6 percent price increase in February of last year.
The DOF said the acceleration in the general price level is largely due to continuing food supply constraints and, to a lesser extent, a non-food price increase brought about by the normalization of global petroleum prices.
“Likewise, the price rise is due mainly to regulated products with high tariff rates and non-tariff barriers,” the DOF said.
“Economic decision-makers need to ease these protective barriers to provide more competition to heavily protected domestic suppliers,” it added.
The agency pointed out that core inflation inched up from 3.38 percent to 3.54 percent, “foreshadowing elevated year-on-year inflation rates in the coming months if supply-side issues are not addressed.”
“Food productivity programs will go a long way in stemming the inflation problem. The Department of Agriculture (DA) has launched a comprehensive program to enhance productivity,” the DOF said.
In a statement last Friday, the National Economic and Development Authority (NEDA) said the cabinet level Committee on Tariff and Related Matters has proposed to temporarily lower most favored nation tariffs for pork and rice in consultation with various stakeholders, to temper food inflation.
NEDA said this complements the proposed significant increase in the minimum access volume (MAV) for pork. According to the DA, it proposed to increase the MAV for pork from the current 54,000 to over 400,000 metric tons for this year.
“We are fast-tracking policies determined to stabilize food supply to ensure that households affected by COVID-19 and the quarantines will not be doubly affected by the increase in food prices,” Karl Kendrick Chua, acting socioeconomic planning secretary, said.
“The government’s proactive and immediate interventions have kept or eased inflation for essential food items such as rice, vegetables, and fruits. We will continue working to augment the supply of meat, particularly pork, to ensure that Filipinos have access to affordable, nutritious, and adequate food,” he added.
Chua said hog repopulation programs in “green zones” or African Swine Fever-free areas need to be prioritized. The program includes the provision of swine livelihood enterprise, establishment of breeder multiplier farms, and intensive and modernized production.
Furthermore, he underscored the need to facilitate the unhampered delivery of agriculture and fishery products and the continued strict implementation of the Food Resiliency Protocol in coordination with local government units.
“This highlights the need for adequate logistics services. We will work with concerned government agencies to regularly assess the supply-demand situation for logistics services in their area and ensure that prevailing rates are fair for both commuters and operators,” Chua said.