THE Department of Finance (DOF) has backed the easing of both tariff and non-tariff barriers to bring down the country’s inflation rate as it warned of “elevated year-on-year inflation rate in the coming months if supply side-issues are not addressed.”
Finance Undersecretary and Chief Economist Gil Beltran said in an economic bulletin over the weekend that the price rise in February is “due mainly to regulated products with high tariff rates and non-tariff barriers.”
“Economic decision-makers need to ease these protective barriers to provide more competition to heavily protected domestic suppliers,” Beltran said, noting that the acceleration in the general price level is “largely due to continuing food supply constraints.”
Sought to clarify what non-tariff barriers (NTBs) should be eased and which commodities should be covered, Beltran told the BusinessMirror these refers to import permits, certificates of necessity, among others, for some commodities which importers have to submit prior to importation.
“Many commodities like fish, meat, and raw food items are subject to this,” Beltran said, adding that these “regulated items are the subject of high inflation.”
He also told the BusinessMirror the Department of Agriculture (DA) is “now conducting studies on all these NTBs and see which ones are not needed anymore.”
Beltran issued the economic bulletin after the Philippine Statistics Authority (PSA) reported on Friday that inflation surged 4.7 percent in February—the highest since December 2018’s 5.1 percent—due to more expensive pork products. This was also higher compared to the country’s inflation rate in February last year at 2.6 percent and also the 4.2 percent inflation rate recorded in January this year. In the first two months of the year, inflation averaged 4.5 percent.
With core inflation inching up from 3.38 percent to 3.54 percent, Beltran also pointed out in his economic bulletin the need to address supply-side issues to avoid an uptick in the country’s inflation rate in the succeeding months.
He noted food inflation rose from 6.64 percent in January to 6.98 percent in February due to the 20.69-percent spike in meat prices and the 16.66-percent rise in vegetable prices. On the other hand, non-food inflation rose from 2.34 percent to 2.69 percent due to the price spike in transport services by 9.82 percent.
The finance official also said food productivity programs “will go a long way” in addressing the inflation problem, adding that DA has already launched a “comprehensive program to enhance productivity.”
Pork tariffs
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua on Friday also said the Cabinet-level Committee on Tariff and Related Matters (CTRM) will submit its recommendation to temporarily lower pork tariffs.
Chua said the CTRM recommendation proposes to immediately lower pork tariffs to 5 percent within the minimum access volume (MAV) and 15 percent outside the MAV for 3 months, with a slight increase to 10 percent within the MAV and 20 percent outside the MAV for 9 months.
Chua lamented that the recent increase in inflation, particularly of pork, was due to the raging African swine fever (ASF) outbreak.
National Statistician Claire Dennis S. Mapa said prices of fresh pork pure meat products increased 55.2 percent year-on-year to an average of P323 per kilo in the National Capital Region in February 2021 from P208 per kilo in February 2020.
For fresh pork meat with bone, Mapa said prices increased 48 percent to P298 per kilo in February 2021 from P202 per kilo in February 2020.
For areas outside of the National Capital Region (AONCR), fresh pork pure meat products increased 53 percent year-on-year to an average of P317 per kilo in February 2021 from P207 per kilo in February 2020.
For fresh pork meat with bone, Mapa said prices rose 55 percent to P280 per kilo in February 2021 from P181 per kilo in February 2020.
Read full article on BusinessMirror