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NEDA: The government is stepping up its interventions to keep inflation in check.

MANILA, Philippines — According to the National Economic and Development Authority (NEDA), the government is advancing a comprehensive set of initiatives to offset the impact of rising commodity prices.

According to the Philippine Statistics Authority, headline inflation rose from 4.0 percent in March 2022 to 4.9 percent in April 2022.

After the consumer price index was rebased to 2018 from 2012, this is the highest inflation rate since 2019. Inflation has averaged 3.7 percent this year, well within the 2.0 to 4.0 percent target for 2022.

“As a result of the ongoing Russia-Ukraine conflict, global commodity prices remain high. Domestically, the impact is seen not only on food and basic items but also on transportation and utilities. To address this, Socioeconomic Planning Secretary Karl Kendrick Chua remarked, “We have put in place a comprehensive set of actions for all affected sectors.”

Inflation in the food sector increased from 2.8 percent in March to 4.0 percent in April. Higher food inflation was caused by faster inflation rates for meat, fish, vegetables, sugar, flour, and oils.

Rice inflation, on the other hand, has been stable at 1.6 percent since the Rice Tariffication Law and Executive Order (EO) No. 135, series of 2021 were implemented, diversifying the country’s rice suppliers.

In the meantime, non-food inflation rose from 5.0 percent to 5.4 percent, owing primarily to rising oil prices.

Household inflation for electricity, gas, and other fuels increased from 17.4 percent to 19.9 percent. Inflation in the transportation sector rose from 10.3 percent to 13.0 percent, with private transportation inflation rising from 35.2 percent to 44.4 percent.

Public transportation inflation, on the other hand, remained stable at 0.8 percent due to maintained fares.

Several initiatives have been proposed by the Economic Development Cluster (EDC) to control supply and temper rising commodity prices.

The EDC suggested that EOs 134 and 135 be extended until December 2022, as well as a temporary lowering of the most favored nation (MFN) tariff rate for corn to 5% in-quota and 15% out-quota with a minimum access volume of 4 million metric tons.

EO No. 134 intends to increase pork supply and slash costs by extending the lower tariff of 15% in quota and 25% out of quota.

Meanwhile, EO No. 135 aims to diversify rice supplies by lowering MFN tariff rates on imported rice from 40 to 50 percent for a limited time.

To supplement the alternatives to corn, the EDC suggested importing additional wheat and generating more cassava as a feed substitute.

In addition, to combat rising gasoline prices, the government is providing fuel subsidies to public utility vehicle (PUV) drivers and farmers.

Around 180,000 PUV drivers and operators have earned their PHP6,500 fuel subsidy from the Pantawid Pasada program as of April 30, 2022.

The Department of Energy is also working to negotiate PHP1 to PHP4 per liter discounts for public transportation from commercial oil companies.

A fuel subsidy program for 158,730 corn farmers and fishermen is also being implemented by the Department of Agriculture.

The EDC also proposed that the MFN tariff rate for coal is temporarily reduced to zero percent until December 2022, and that the buffer stock be maintained at the present 30-day minimum inventory.

“To mitigate the impact of inflation and rising prices, the administration is speeding up the implementation of these policies.” Meanwhile, as we move more sections of the country to alert level 1, we expect our economy to recover faster and be more resilient to foreign shocks,” Chua said.

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