Salceda tasked to monitor rising inflation; recommends measures

By Mar S. Arguelles LEGAZPI CITY --- Albay Rep. Joey Salceda on Monday said he foresees that the country’s inflation rate of 5.6 percent in July would continue to surge and hover around till the end of the year unless the administration’s economic managers implement an aggressive economic stimulus that would cushion the effects of rising prices of commodities. Salceda said as an economic analyst his office regularly uses an inflation model that keeps track of the Month on Month (MoM) inflation trend, including disaggregated Consumer Price Index (CPI). Based on this model, the July inflation is likely to have spiked to 5.6 percent and by August inflation would peak at 5.9 percent and this will hover at around 5.6 percent till the end of the year, Salceda predicted. Salceda, however, said that with the economic stimulus and the decisive execution by various economic agencies the rising inflation can fall beneath 5 percent this September and end the year at 4.4 percent. Salceda in an interview said he was appointed by House Speaker Gloria Macapagal Arroyo as her Special Focal Person for Counter-Inflation Measures. Arroyo assigned me to be in-charge to monitor, oversight and report on the measures. He said he has consulted with the administration’s economic managers and has discussed the five economic measures that would bring down inflation to a comfortable level. The economic measures that need to be implemented so as to bring down the rising inflation include: reducing the tariff on the importation of consumer products like fish, meat, feed wheat, vegetable, and rice. For rice, which is the most basic item, Salceda said the government plans to import 500,000 to 800,000 metric tons of well-milled rice with staggered deliveries on over 5 to 6 month period. He said the tariff reduction on imported rice is the structural solution and the Lower House has terminated debates on the bill and is likely to approve it in the coming weeks. Another measure at hand is to ask departments with attached regulatory agencies such as the Energy Regulatory Commission, Water regulators, the Department of Energy and other agencies to defer regulated price adjustments that add to cost pressures until inflation goes back comfortably to the 2-4 percent target band. As for the central monetary authorities, the Bangko Sentral ng Pilipinas (BSP and its Monetary Board) would be asked to make a robust adjustment in the policy rates (interest rates) to respond to stubborn high domestic prices by stamping inflationary expectations and opportunistic impulses from the price levels.