Biz groups: Govt measures needed to tame inflation
Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis (right) and Roberto Amores, president of the Philippine Food Processors and Exporters Organization Inc. (Philfoodex), talk about the inflation during a press briefing at the PCCI office in Taguig City. PHOTO BY ROGER RAÑADA
SEVERAL business organizations on Tuesday urged the government to implement measures, including suspending tax increases on fuel and importing more rice and sugar, to manage the country’s soaring inflation, which one industry leader downplayed.
In a press conference in Taguig City, Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis said that while the higher-than-forecast 6.4-percent inflation in August was not alarming, interventions were needed to lower food prices.
“We have been [so focused on]the numbers in the inflation [rate that]we are forgetting that these are just [the]weighted average of certain products,” Ortiz-Luis said.
“While we are concerned that there is undue increases in certain items, 6.4 is not something that should be alarming as a number,” he added.
Higher inflation is normal for economies aiming to attain a growth of 7 percent to 10 percent, according to the Philexport chief.
“The food sector is the one that is alarming. The problem really is rice, sugar, fish, [and]vegetables, because these are the ones that cause [higher]inflation,” which “is still manageable,” Ortiz-Luis said.
To help temper inflation, the Employers Confederation of the Philippines (ECOP) advised the government to delay imposing fuel tax increases.
“While it would be difficult and unproductive to reverse Train 1 and delay the implementation of Train 2, the government can consider suspending any further automatic increase in taxes on petroleum products in the coming years, as originally proposed,” ECOP said in a statement, referring to Republic Act 10963, or the Tax Reform for Acceleration and Inclusion Act, and House Bill 8083, or the Tax Reform for Attracting Better and High Quality Opportunities (Trabaho) measure.
“This will temper further increases in the cost of transport and power and, most important, rein in inflation expectations,” it added.
Critical factors
The first package of the government’s Comprehensive Tax Reform Program (CTRP) and implemented on January 1, Train reduces personal income taxes and imposed higher excise taxes on fuel, vehicles, tobacco, sugar-sweetened beverages, and coal.
Under this law, the excise tax on diesel increased from zero to P2.50 this year and will rise to P4.50 in 2019 and P6 in 2020; gasoline, from P4.35 to P7 this year, P9 in 2019, and P10 in 2020; and aviation turbo fuel, from P3.67 to P4 in 2018.
Trabaho, meanwhile, seeks to reduce corporate tax from 30 percent to 20 percent after 10 years, and rationalize tax incentives by y making them performance-based, targeted, time-bound and transparent.
While oil price movements in the international market are beyond the government’s control, there are “a number of actions that can be immediately put in place to curb inflation and help not only employers, but [also]the less fortunate,” who bear the brunt of higher prices the most, ECOP said.
“Food, and rice in particular, is one of the critical factors affecting inflation. While the BSP (Bangko Sentral ng Pilipinas) is implementing monetary measures to address inflation, the surging price of rice is a purely supply-and-logistics issue,” it added.
“While it has been stated time and again that inflation will peak in the third quarter, there really is no assurance that this will come about,” ECOP said.
“What is certain is the fact that there is creeping inflation and this can be addressed with coordinated efforts from” the BSP and its Monetary Board; the Labor, Trade, and Finance departments; and the National Food Authority, it added.
Rising cost
According to Roberto Amores, president of the Philippine Food Processors and Exporters Organization Inc. (Philfoodex) and chairman of the Philippine Chamber of Commerce and Industry’s agricultural committee, importing rice is another way to address the rising cost of basic goods and commodities.
“We know for a fact that we have not been rice self-sufficient in the last 20 years, thus a program of regular importation equivalent to the projected shortfall should be part of the policy, although this is not the long-term solution of securing national food security,” Amores said.
Another way is the pasasge of the rice tariffication bill, which is expected to help stabilize rice prices and ensure stock sufficiency, as well as protect Filipino farmers, he added.
Amores also said they are also requesting the Sugar Regulatory Administration (SRA) through Agriculture Secretary Emmanuel F. Piñol to allow domestic food processors to import 100,000 metric tons of sugar, or about 50 percent of their sugar requirement.
According to him, sugar imports from Southeast Asian countries currently enjoy a 5-percent preferential tariff under the Asean (Association of Southeast Asian Nations) Free Trade Agreement.
“These food processors buy their sugar at the equivalent of P26 to P28 per kilo,” Amores said, noting that Southeast Asian products have been coming into the country and threatening domestic producrs with sugar inputs priced from P60 to P65 a kilo.
WITH GLEE JALEA
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