Draft EO tames inflation by way of tariff cuts

The country’s economic managers will submit a draft executive order to President Rodrigo Duterte to address the rising food inflation, Malacañang said Wednesday.

Presidential Spokesman Harry Roque said the order seeks to “remove administrative constraints and non-tariff barriers on the importation of fish, rice, sugar, meat, and vegetables.”

“This means, they would make the process of importing food simple,” said Roque, adding that the EO will specifically tackle the non-tariff barriers and non-tariff impediments.

He also said that economic managers came up with short-term anti-inflationary measures, assuring the public that the country has enough supply of rice.

“We have 4.6 million sacks of rice available in National Food Authority warehouses which will be released immediately. We have around two million sacks of rice which will arrive before the end of September, and the NFA Council has likewise approved the importation of 5 million sacks that will arrive over the next 1.5 months,” Roque said, pointing out that 2.7 million sacks will be allocated to curb the high prices in Zamboanga, Basilan, Sulu, and Tawi-Tawi.

The Palace official said the administration are projecting a harvest for 2018 amounting to 12.6 million metric tons or around 252 million sacks of rice. Another five million sacks of rice will be imported early next year.

However, aside from the importation, the economic managers also plan to simplify and streamline the licensing procedures for rice imports of the NFA. Roque said they will form monitoring teams for surveillance of rice from ports to NFA warehouses and outlets and urge the Senate to immediately pass the Rice Tariffication Bill this September.

According to Roque, economic managers will allow fish imports to be distributed in Metro Manila and other markets in the country. They will also set up public markets where producers can sell chicken products directly to the end customer and provide cold storage facility.

On sugar, Duterte’s economic team will simplify procedures to allow importation to direct users to moderate cost to consumers. On vegetables, the government will improve the logistics, transport distribution and storage as this would reduce prices for consumers.

“In line with this, the President has said in his address yesterday with Secretary Salvador Panelo that he wants the smooth delivery of vegetables from the North going to Metro Manila,” said Roque. “Prioritize the release of essential food items in the port—this is what we’re telling that there should be a hands-on designated person to sign the papers especially the imports of rice in the Customs.”

Meanwhile, the economic managers suggested medium to long-term measures in the agriculture industry and fisheries sector.

“For agriculture, they will facilitate a better access to farming technologies, promote research and development, develop resilient and high yielding varieties of rice, promote utilization of high yielding variety of crops, and reassess the country’s planting season and crop viability in each region and LGUs to aggressively impose the idle land tax,” said Roque.

“For the fisheries, they will possibly amend the Fisheries Code and other policies governing the sector,” added Roque, implying they would also introduce tariffication for sugar, fish, meat, and vegetables.

Meanwhile, Roque said that the members of the Cabinet discussed the establishment of direct flights from Manila to Tel Aviv, the State of Israel’s capital.

The discussion was made several days after the President signed three fundamental agreements on labor, science, and trade as a way of strengthening the bilateral ties with the Jewish state.

As this developed, the DTI said it will put on hold the prices of some basic goods for at least three months.

The agency made the announcement even as they appealed to manufacturers, not to increase the prices of certain products such as canned sardines, canned meats, all kinds of milk, coffee, bottled water, instant noodles, bread, salt, soy sauce, fish sauce, vinegar, bottled water, candles, and all manufactured basic needs and prime commodities.

Trade Undersecretary Ruth Castelo said the moratorium on price increases, however, will depend on the item and should not last longer than three months. She added that the agency DTI is not considering price ceilings at this time.

She also said that at least five million bags of rice imports will arrive in October to help bring down prices of the staple grain.

Inflation accelerated to 6.4 percent year-on-year in August, the fastest in nearly 10 years based on 2012 prices.

On Tuesday, Trade  Secretary Ramon Lopez said he was working on 100-percent compliance from businessmen on suggested retail prices of basic goods.

He added that the agency also expanded its SRP monitoring to cover 207 items in 600 stores.

At the House of Representatives, Camarines Sur Rep. Luis Raymund Villafuerte, a pro-administration lawmaker, has appealed to the Senate to pass the rice tariffication bill to clear the way for more rice imports into the country—that when implemented—is expected to bring down the retail cost of the staple by as much as P7 per kilo.

Villafuerte said he was reversing his earlier position barring private traders from importing rice as he backed Duterte’s multi-pronged approach to stabilize the retail price and supply of rice as a way to counter the spike in inflation.

“Decisive leadership is what we need right now and that is what President Duterte has shown us,” Villafuerte, vice chairman of the House committee on appropriations, and local governments, said.

Villafuerte was among the co-authors of the rice tariffication bill that was passed by the House on third reading last month, and still awaiting approval of the Senate. However, Senator Cynthia Villar, who chairs the chamber’s committee in agriculture and food, had said the Senate could pass the measure this month.

Aside from rice tariffication, the President also cited other measures such as exploring the option of buying cheap rice from Sabah and reviving barter trade between Sulu and Tawi-Tawi and neigboring states in the region; prosecuting traders manipulating rice prices; streamlining the processes for rice imports; and removal of checkpoints that have been blamed for jacking up the cost of rice and other food items from the farms to the markets.

Villafuerte said the President’s proposal to revive the barter trade in Southern Mindanao, for one, will not only help stabilize rice supply in the area but will also boost economic trade between that part of the country and its neighbors.

He also supported the President’s move to act decisively on the selection of a third player in the telecommunications sector by November or December this year.

Meanwhile, Speaker Gloria Macapagal Arroyo said on Wednesday that the House leadership will work on the abolition of the National Food Authority Council as desired by President Rodrigo Duterte.

“Well, if he asks for it, then we will work on it,” Arroyo told reporters after President Duterte aired his intention to abolish the NFA Council last Tuesday.

The NFA Council is being blamed for the country’s rice crisis that further complicated the inflation problem.

“Remember when I was in Pampanga I was asked, I am neither here nor there. It can be abolished, it can be retained,” said Arroyo. “[But] if it is a President’s policy call, we will work on it,” Arroyo said.

The NFA Council is composed of at least 11 government agencies, including the NFA, the National Economic and Development Authority, the Development Bank of the Philippines, the Office of the President, the Department of Trade and Industry, among others.

Earlier, opposition lawmakers led by House Minority Bloc leader and Quezon Rep. Danilo Suarez demanded the resignation of top food security officials of the government following the country’s rice crisis, importation of agricultural products instead of protecting local farmers and fishermen, and pushing the legalization of rice smuggling in some parts of Mindanao.

Topics: President Rodrigo Duterte , food inflation , Presidential Spokesman Harry Roque ,
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