PCCI to govt: Tweak policies to temper hike in consumer prices

2019-02-07 02:33:07

THE rice tariffication bill should be signed into law and sugar imports must be deregulated if the government intends to temper inflation this year, the country’s largest network of local firms said on Tuesday.

In a text message to the BusinessMirror, Philippine Chamber of Commerce and Industry (PCCI) President Maria Alegria Sibal-Limjoco said President Duterte should sign into law the rice tariffication bill in order to control inflation this year. The bill is now on the President’s desk awaiting his signature.

Government economists estimate prices of rice will go down P4 to P7 per kilogram once the bill is approved.

The measure will convert the country’s rice-import cap into tariffs as part of the government’s commitment to the World Trade Organization. It will also strip the National Food Authority of its power to control the volume of imported rice entering the Philippine market.

The PCCI call comes on the heels of lobbying by other groups for a veto of certain provisions of the rice tariffication bill, which they said could seriously impair the operations and cash flow of local rice millers that have taken out multimillion-peso loans for such.

Sugar lib

LIMJOCO, meanwhile, also called on the government to focus on the liberalization of the Philippine sugar industry.

“[The] PCCI continues to be optimistic inflation will stabilize at below 5 percent with prices of food and nonalcoholic beverages going down. We also think the enactment of the rice tariffication bill and measures to remove the import quota on sugar, [as well as] addressing port congestion and high shipping charges, will contribute to the reining in of inflation,” Limjoco told the BusinessMirror.

PCCI Chairman George T. Barcelon argued the liberalization of sugar will contribute to government efforts to deal with inflation, as the staple is a primary input in many food items.

Barcelon added the government should “control what it can control,” such as measures on staple food items, as it has no capacity to manage domestic fuel prices that depend on the global market. Inflation peaked at 6.7 percent in September and October of last year largely due to supply pressures and unstable crude-oil prices.

Inflation—or the general increase in commodity prices—rose 4.4 percent in January, according to data from the Philippine Statistics Authority.

Inflation in January was faster than the 3.4 percent recorded during the same month last year, but was slower than the 5.1 percent last December. It was also still over the government’s target range of 2 percent to 4 percent.

‘Junk TRAIN’

TO manage inflation, consumer groups Laban Konsyumer Inc. and Bantay Konsyumer, Kuryente, Kalsada maintained their position that the Tax Reform for Acceleration and Inclusion (TRAIN) law should be junked.

Laban Konsyumer President Victorio Mario A. Dimagiba told the BusinessMirror the January figure is additional evidence the TRAIN law—which slapped excise taxes on fuel, sugar-sweetened beverages, among others—should be blamed for the higher prices of basic goods.

“Inflation at 4.4 percent in January is still high and above the maximum target, and yet we enjoyed lower prices of fuel, rice and electricity for much of the month. This should prompt economic managers to admit mea culpa that the tax-reform law is a bad law,” Dimagiba said.

“Res ipsa loquitor [The thing speaks for itself],” he added.

Bantay Konsyumer Convenor Louie C. Montemar, for his part, advised the government to reassess its decision to implement the imposition of the second tranche of fuel taxes.

“As before, [the] government needs to step on the brake [by] suspending the TRAIN-imposed tax on petroleum products. That is the culprit, all things considered,” Montemar said.


https://businessmirror.com.ph/2019/02/06/consumers-eye-challenge-to-tax-on-cement-imports/

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