Agricultural productivity must increase and the campaign against unfair selling practices must be strengthened to mitigate the impact of rising prices, according to the National Economic and Development Authority (NEDA).
Socioeconomic Planning secretary and NEDA director-general Cayetano W. Paderanga, Jr. suggests these policy measures after the National Statistics Office (NSO) reported last July 5 that commodity prices increased by 5.2 percent in June 2011 compared to June 2010, based on 2006 prices. As a result, the year-to-date inflation rate reached 4.7 percent.
Apart from increasing agricultural productivity and strengthening the campaign against unfair selling practices, Paderanga added other measures that may potentially temper the impact of rising prices, such as intensification of science and technology application in Philippine farms, and the improvement of logistical support to raise distribution efficiency, especially in agri-fishery transport.
“Reducing market layers by directly linking producers to retailers and possibly to consumers, and promoting the more efficient use of energy are some measures that could also relieve pressure from rising prices,” Paderanga added.
“To achieve energy independence in the long run, the country can pursue various strategic energy infrastructure projects and toward this end, expand oil and gas exploration, and pursue renewable energy or alternative fuel development, among others,” Paderanga said.
He also commented that improving price monitoring and the enforcement of relevant laws, as well as undertaking a strong campaign against unfair selling practices, especially in areas outside Metro Manila, may also reduce the impact of inflation.
He added that the higher inflation rate was pushed by increases in some food commodity prices due to supply shocks in major domestic food producing areas, as the country was hit by three tropical storms (Dodong, Egay and Falcon) last June.
Meanwhile, the price of fish products normalized after the waning of the “fish kill” scare, with prices of fish commodities increasing as demand started to perk up.
The rise in education fees also contributed to inflation with classes opening in June and some schools, including colleges and universities, adjusted their tuition fees.
Fuel prices also raised inflation with the increase of average prices of domestic fuel.
“Average gasoline prices increased from P56.24 per liter (/li) in May 2011 to P57.26/li in June 2011—an increase of1.8 percent. On the other hand, diesel oil increased by 2.5 percent, from P45.7/li to P46.9/li on average,” Paderanga said.
The NSO announced that starting with the June 2011 data, the consumer price index (CPI) series will be based on 2006 prices and will be released simultaneously with the 2000-based CPI until December 2011.
Using the year 2000 prices, the NSO said inflation rose to 4.6 percent from 4.5 percent in May 2011, bringing the year-to-date inflation to 4.3 percent, still within the 2011 DBCC target of 3.0-5.0 percent.
Paderanga also said that using the 2000-based inflation rate, the 4.3 percent year-to-date inflation is still within the government’s target of 3.0-5.0 percent, as set by the Development Budget Coordination Committee (DBCC). The DBCC is set to adjust the government’s inflation target using 2006 prices.
Inflation rate is the percent increase in the prices of goods and services commonly purchased by households, as measured by the CPI. [NEDA]
