Arroyo Proposes 5 Economic Measures to Cushion Inflation

House Speaker Gloria Macapagal Arroyo has proposed at least five economic measures that would cushion the impact of rising inflation, Albay (2nd District) Rep. Joey Salceda said.

According to the newly-installed House Speaker, the measures would reduce tariff on oil, electricity and food commodities such as fish, rice and meat, Salceda said in an interview on Thursday.

Salceda, a key economic adviser during the Arroyo presidency, said that during a Development Budget Coordination committee meeting on Tuesday, the Speaker discussed inflation mitigation measures with Secretaries Benjamin Diokno of Budget, Ernesto Pernia of the National Economic and Development Authority, and Carlos Dominguez of Finance.

Arroyo and the current economic managers have reportedly drawn up measures that Congress and the Executive could pursue based on the magnitude of a commodity’s contribution to the 5.2 percent July inflation rate.

Inflation is the rate by which the general level of prices for goods and services is rising and consequently the purchasing power of the currency is falling.

Salceda, who remains a respected economist in government, said these measures are designed to lower prices by reducing cost components, such as import tariffs on consumer products like fish, meat, and vegetables.

The proposed measures include reducing tariff on fish imports to zero. Also, the NFA will be called upon to purchase 500,000 metric tons of well-milled rice with staggered deliveries over 5 to 6 months period. However, such actions will require a congressional nod, he explained.

Meantime, the Bangko Sentral ng Pilipinas (BSP) was asked to consider setting an additional 25 basis point hike on its key rates as a follow up to the two 25bps already implemented to cleanse both consumer and business expectations of any potential speculative opportunistic content, he stressed.

Salceda said once the measures are carried out, the country’s inflation rate will be cut by 1.8 percentage points. (PNA)