DOF wants further easing of tariffs, NTBs
Market competition to fight rising inflation
The Department of Finance (DOF) wants to further relax the country’s trade barriers imposed on regulated products to provide more competition amid rising prices of consumer products in the domestic market.
In his latest economic bulletin, Finance Undersecretary Gil S. Beltran said the continuous spikes in rate of increase in consumer prices was mainly due to regulated products with high tariff rates and non-tariff barriers (NTBs).
“Economic decision-makers need to ease these protective barriers to provide more competition to heavily protected domestic suppliers,” Beltran said in his report submitted to Finance Secretary Carlos G. Dominguez III.
Beltran noted that the acceleration in inflation is largely due to continuing food supply constraints and, to a lesser extent, a non-food price increase brought about by the normalization of global petroleum prices.
Core inflation inched up from 3.38 percent to 3.54 percent in February, which Beltran said “foreshadowing elevated year-on-year inflation rates in the coming months if supply-side issues are not addressed.”
Food inflation rose from 6.64 percent in January to 6.98 percent last month. Beltran said this is due to the 20.69 percent spike in meat prices and the 16.66 percent rise in vegetable prices.
Non-food inflation, on the other hand, rose from 2.34 percent to 2.69 percent due to the price spike in transport services by 9.82 percent.
Beltran, however, noted that the general price level has decelerated month-on-month from 1.27 percent to 0.23 percent in February.
“Average food price actually declined by 0.07 percent in February as vegetable prices declined by 6.71 percent and meat inflation eased from 6.63 percent in January to 2.54 percent in February,” the finance official said.
The country’s headline inflation rate was registered at 4.7 percent in February, its fastest pace since January 2019. The latest figure also quickened further from 4.2 percent in the previous month and significantly higher compared with 2.6 percent in February 2020.
National Statistician Claire Dennis S. Mapa said on Friday, March 5, that the uptrend was mainly brought about by the uptick in the inflation of the heavily-weighted food and non-alcoholic beverages at 6.7 percent from 6.1 percent in January.
Excluding selected food and energy items, core inflation inched up to 3.5 percent in February 2021 from 3.4 percent in the January and 3.2 percent in the same month last year.
The February inflation brought the country’s first two-month average at 4.45 percent, above the government’s target of 2.0 percent to 4.0 percent.