By Madelaine B. Miraflor
To arrest the rising prices of basic food commodities in the market, President Rodrigo Duterte ordered the immediate replenishment of Department of Trade and Industry’s (DTI ) budget for Pondo sa Pagbabago at Pag-asenso (P3) program.
Agriculture Emmanuel Piñol said that during the Cabinet Meeting on Monday, government officials delved into what’s causing the increase on the price of food commodities, eventually claiming that Tax Reform for Acceleration and Inclusion (TRAIN) has little to do with it.
“After deep analysis, it was found out that the cost of production for commodities has barely gone up and that the main culprits are more on just speculations and the growing amount of loans done through five-six lending obtained by small and medium entrepreneurs (SMEs),” Piñol said in an interview.
Piñol said that SMEs owners are forced to jack up their prices as they have to pay exorbitant nominal interest rate of 20 percent for the loans they have obtained in order to purchase the items they are selling.
As of now, he said the amount of money released through informal lending stood about R30 billion.
“Unless we deal with that, consumers will be at great loss because they are the ones who have to shoulder the interest of five-six lending,” Piñol said.
To resolve this issue, Duterte asked the Department of Finance (DOF) to make available additional funds worth R4 billion for the replenishment of P3 funds.
P3 program is a R1-billion financing program intended to give SMEs better access to financing, reduce their cost of borrowing, and battle loan sharks “preying” on these small entrepreneurs.
The fund will prioritize the country’s 30 poorest provinces.
“Initially, [the President] wants to increase the amount money allocated to DTI for small businesses and entrepreneurs from the current R1 billion every year to about R5 billion this year,” Piñol said.
The rate of increase in consumer prices year-on-year hit a fresh five-year high in May amid skyrocketing food and petroleum costs, data from the Philippine Statistics Authority (PSA) showed.
To be specific, inflation last month rose by 4.6 percent, slightly quicker compared with 4.5 percent in the previous month, and also faster than the 2.9 percent in the same month last year.