By Gabriellea Parino and Chelsea Denise Din
Albay Rep. Joey Sarte Salceda calls on the Marcos administration to focus on boosting dollar-earning industries amid the depreciation of the Philippine peso to the US dollar, predicted to even go down to an all-time low value of P65: $1.
Salceda, chairman of the House Committee on Ways and Means, discussed the state of the Philippine economy in an interview with CNN Philippines, where he tackled the conditions of the different industries in the country, particularly agriculture.
“The government should accept inflation as a given consequence, but should ensure food security because 25 percent of our entire food supply is imported and very susceptible to the peso,” Salceda said.
He also predicted that spending will increase by at least five percent while pushing for the preparedness and assurance of food security as a probable solution, especially for Filipinos in the poverty line.
The Bicol solon also identified business process outsourcing (BPOs), the overseas Filipino workers (OFWs), the mining industry, and tourism as the pillars of the country’s dollar-earning industry.
“Our imports reach up to P139 billion, while exports are only at P107 billion. We also have $39 billion that need funding.
Our BPOs and OFWs are able to support this, but there remains a red flag because our balance of payments (BOPs) isat eight percent of our GDP (gross domestic product) which is not a good sign because it is at its highest within the last 10 years,” he explained.
Salceda also said the country has a strong Gross International Reserves (GIR) as caused by the funds borrowed during the height of the pandemic.
He claimed that while the dollar-earning industries may yet usher in a solution to the current inflation, it may not be enough to resolve it fully as its positive impacts are yet to be seen in the medium-term.
Aside from the possible price increase of the agricultural products, the congressman said that the unnoticeable ‘killer’ to ordinary families was the additional P54 billion that was being spent on incremental power costs every month.
“For example, in some electric co-ops they started with nine and now they’re ending up with 17 to 19 pesos per kilowatt hours that’s the real killer actually right now,” Salceda said.
He added that the government really needs to address the high power cost, which affects both the consumers and the Philippines’s global competitiveness.
Salceda said there are suggestions for the government to finance the bills for the following six months since there would be a lot of people whose electricity will be cut off due to their inability to pay their bills.
“The power cost adjustment will be pushed, I’m using here an extreme, but essentially what I’m trying to say is that we need to stretch the payment for this very huge power cost adjustment for the ordinary Filipinos,” Salceda said.
He pointed out that the reason why the peso was falling was because of the US who during the pandemic released 6 trillion money to the money supply, which they need to bring back because of the big amount they released that has no output. Thus causing new heights of inflation in the rest of the world.
He also added that the US opted to bring back their target inflation of two percent, which could happen if they have 400 additional basis points of increases, pushing the peso to 65.
Salceda compared the fluctuations of the peso’s value to various cathartic periods throughout history which directly impacted it. He, however, insisted that the country is not yet in its crisis period.