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A specialist in economic development and member of the Bangko Sentral ng Pilipinas (BSP) Monetary Board (MB), which sets policy, acknowledges the critical role that infrastructure projects funded by the “Build Better More” initiative would play in reducing food costs, which are the main cause of high inflation.

This is because, despite predictions that El Nio will begin to affect the nation in the second half of the year, risks to the inflation outlook remain upside-biased due to probable increases in transportation costs, wage adjustments, and pressures from rising food prices.

Bruce Tolentino, a member of MB, said the nation needs to invest more in infrastructure to manage the dangers associated with El Nio in an interview conducted on the sidelines of a business journalism seminar held by the Economic Journalists Association of the Philippines on Saturday in Clark, Pampanga.

If we can predict weather patterns far enough in advance, we can enhance irrigation in areas experiencing drought, which will help us manage the effects. That’s an investment in water management and irrigation, he said.

In particular, in agri-food supply chains, Tolentino said the infrastructure improvements funded by the “Build Better More” initiative are “significant” in eliminating middlemen.

“If there isn’t any infrastructure, the issue is that the farmer will only sell what he can carry if there isn’t anything else to offer. However, if infrastructure existed, he could carry more, we could have a pickup point, and there would be an aggregator who could bring all the products to the market together, shortening the chain. He continued that there will be fewer personnel in the marketing chain if the infrastructure is strengthened.

As of March 31, the “Build Better More” program’s 194 infrastructure flagship projects included at least 14 projects from the agricultural industry.

Physical connectivity and water resources, including irrigation, water supply, and flood management, account for most infrastructure flagship projects.

The list also contains infrastructure-related initiatives in digital connection, health, power, and energy.

Tolentino voiced that the government should allocate more money toward boosting agricultural growth through increased food productivity and competitiveness.

“It’s better fertilization techniques, better irrigation, better information for farmers on weather patterns, and support for the farmers when it comes to managing their farm businesses,” he said. “It’s also improved seeds, improved germplasm for animals, training for farmers to use the improved seeds and improved germplasm.”

According to Tolentino, the Department of Agriculture (DA) and local government entities’ budgets can be restructured so that “more money is spent on productivity enhancement.”

“Because every municipal government has a large budget as well. Because they don’t know what to do with it, they should be able to manage their budget and assist agriculture with the DA’s help, he said.

Tolentino added that as food and energy costs continue to be the main drivers of the nation’s inflation rate—with food goods alone accounting for around 38% of the consumer price index on average over the past few years—it is necessary to address supply problems in the agricultural sector.

From 7.6 percent in March to 6.6 percent in April, the headline inflation rate continued to decline and fell within the BSP’s anticipated range of 6.3 to 7.1 percent.

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