MANILA, Philippines — The country’s economic managers on Wednesday presented a list of planned reforms that they said could immediately cool down runaway inflation if implemented this month.
Inflation rose for the eighth consecutive month to 6.4 percent in August, the fastest pace in nearly a decade. This may pressure monetary authorities to hike policy rates for the fourth time this year.
The August print exceeded July’s 5.7 percent and topped the Bangko Sentral ng Pilipinas’ worst case scenario estimate for the month. In the first eight months, inflation averaged 4.8 percent, well above the central bank's 2-4 percent target range for the year.
In a joint statement released after a meeting, the government’s economic development cluster proposed “immediate” reforms to combat rising commodity prices.
“It’s very difficult to quantify [the possible reduction in inflation rate] at this point but if the proposed measures are implemented immediately within September, there’s a great likelihood that the August inflation of 6.4 percent could be the peak,” BSP Deputy Governor Diwa Guinigundo told a press conference.
The planned measures include the following:
- FISH: The Department of Agriculture will replicate the issuance of certificates of necessity to allow imports to be distributed in wet markets in the country.
- RICE: More than four million sacks of rice available in National Food Authority warehouses will be immediately released to the market across the country. More sacks of rice will be imported. The economic managers will also recommend to President Rodrigo Duterte the issuance of a directive to further simplify and streamline the licensing procedures for rice imports of the NFA. Meanwhile, the Department of Trade and Industry, NFA, Philippine National Police, National Bureau of Investigation and farmer groups will form a monitoring team for surveillance of rice from ports to NFA warehouses and retail outlets.
- CHICKEN: The DA and DTI will convene poultry producers and set up public markets where producers can sell directly to the end customer. DA will provide cold storage for this purpose.
- SUGAR: The Sugar Regulatory Administration will open importation of sugar to direct users to moderate cost to consumers.
- VEGETABLES: No action; spike in prices attributed to seasonal weather conditions.
- The Bureau of Customs will prioritize the release of essential food items in the ports.
“The government’s economic team has previously announced that inflation is expected to peak in the third quarter before tapering off towards the latter part of the year, and then fall within the government’s target by next year,” the country’s policymakers said.
“However, inflation in August was beyond the median market forecast. We remain steadfast in putting forward and accelerating these measures that will address food prices for all Filipinos,” they added. — Ian Nicolas Cigaral