By ATTY. JOEY D. LINA
“High inflation rate and weak peso – Don’t justify; do something.” That’s the Twitter post of Sen. Panfilo Lacson last Saturday, amid efforts to downplay the impact of consumer prices accelerating to a new five-year high of 5.2 percent last June.
“There’s money going around, that’s why we have inflation – there’s money from the free tuition, from the taxes, there’s money because of the ‘Build, Build, Build’ – but it is not something to worry about,” presidential spokesman Harry Roque Jr. said. “It’s within historical amounts, it’s higher than usual but it’s something we should not be alarmed with.”
Despite the attempt to minimize the significance of prices of basic goods and services having spiraled out of control, many agree that Senator Lacson has a good point, especially in light of the Pulse Asia survey released last April which showed that controlling inflation is the second most urgent national issue that most Filipinos want the Duterte administration to effectively address.
It is indisputable that the continuing rise in the inflation rate, expected to go even higher this third quarter, is certainly hurting many Filipinos, most especially the poor who are jobless and also the self-employed whose lack of a fixed and regular income makes them unable to benefit from the income tax exemption provided by the TRAIN Law that has also contributed to the hike in prices.
To be sure, the implementation of the TRAIN Law isn’t solely to blame; the primary culprit is the rising prices of crude oil in the international market which adversely affects production and transport costs across our economy. Also fueling rising inflation is the weakening of our peso – which has sunk to its lowest level in 12 years against the dollar – due to the rising interest rates in the United States that attract fund managers to investments that are dollar-denominated. And there was also the tight rice supply that aggravated the situation.
Many financial experts tend to blame the Bangko Sentral ng Pilpinas (BSP) for not acting quickly to mitigate inflation with monetary policies to slow down the decline of the peso, considering that it was already known since two years ago that global interests rates were rising and that capital outflows would result in depreciation of the peso.
Still, taming inflation has become even more urgent. So what ought to be done at this point?
BSP officials, who said the latest inflation rate was a “setback,” can still prevent the situation from getting worse by coming up with more decisive measures to control inflation, including hiking interest rates to a level that would effectively stop the “reactive effects” of inflation.
Another way to beat inflation is for government to really intensify the “Build, Build, Build” program by a “Spend, Spend, Spend” program. It is lamentable that in the just-released 2017 annual audit report of the Department of Public Works and Highways, the Commission on Audit said only P222.66 billion, or 33.6 percent of the P662.69 billion DPWH budget for 2017, was disbursed “due to the delayed/non-implementation of infrastructure projects.”
Also, government must work for the immediate passage of the rice tariffication bill to amend the Agricultural Tariffication Act of 1996 that could reduce inflation by 0.4 percent if implemented as early as the third quarter of this year. The new law would enable private traders to import as much rice as needed, subject to a government-imposed tariff rate, ensuring more supply of the staple food to bring down prices.
And regarding ensuring adequate, or even more than adequate, food supply to bring down prices, local government units can do a lot to encourage people to plant food for their own consumption. During my two terms as governor of Laguna province, we pursued the Food Always In The Home (FAITH) program that enabled people to produce clean nutritious food in their backyards, thereby reducing home food cost by as much as 30 to 50 percent, and improving family nutrition. The program has since been adapted by the National Nutrition Council.
But it still boils down to intensified job creation to make it easier for impoverished Filipinos to cope with hard times. It has now become more compelling indeed for LGUs to do everything necessary, with help from the private sector, to provide alternative domestic employment and make the business climate more conducive – with adequate infrastructure and improved ease of doing business –for more investments to spur job creation.
There is a pressing need for full implementation of the strengthened Public Employment Service Office (PESO) Act, RA 10691, to facilitate more employment at grassroots level. Enacted in 2015, it calls for establishing PESOs in all provinces, cities, and municipalities, to be operated and funded by LGUs and linked to the central and regional offices of the Department of Labor and Employment for coordination and technical support.
Its purpose is similar to that of the Laguna Employment and Manpower Development Council (LEMDC) I organized in Laguna. LEMDC specifically pursued job creation efforts and training of unskilled workers for business enterprises in the province. The LEMDC concept and organizational structure were later used by the Technical Education and Skills Development Authority as its provincial template.
The PESO law, as well as strengthening of our micro, small, and medium enterprises (MSMEs) thru improved credit access, would go a long way in addressing the top concerns of most Filipinos, especially on joblessness and inflation.
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