Gov’t accelerating measures vs inflation

September 6, 2018

 

By Joann Villanueva  

MANILA --- Budget Secretary Benjamin Diokno said Wednesday the government is fast-tracking the implementation of social mitigating measures to soften the impact of elevated inflation on the poor.

He was referring to, among others, the unconditional cash transfer (UCT) program, which targets some 10 million poorest households in the country, as well as the Pantawid Pamilyang Pilipino Program (4P). About P25.6 billion has been allocated for the UCT program this year. Under the program, beneficiaries will be given a monthly subsidy of P200.

Under the proposed 2019 national budget, about P36.5 billion has been appropriated for this cash transfer program.

The government is also implementing a fuel subsidy program for jeepney drivers to temper the impact of higher oil prices, due to the combined effects of the tax reform program and spikes in world crude prices.

The government, under the Pantawid Pasada Program, will extend an P803 monthly fuel subsidy to public utility jeepney (PUJ) operators and drivers from July to December this year. The Department of Energy (DOE) said the amount will be increased to P1,710 per month in 2019. The program will cover some 179,850 PUJ units with existing franchises.

Last August, the rate of price increases rose to 6.4 percent from month-ago’s 5.7 percent, bringing the average in the first eight months this year to 4.8 percent, way above the government’s 2 percent to 4 percent target.

During the meeting of the inter-agency Development Budget Coordination Committee (DBCC) last July, it was announced that inflation forecast for this year is likely to exceed the upper end of the target at a range of 4 percent to 4.5 percent. “We’re hopeful that the figure will taper off in the last quarter of 2018 and we also expect inflation to come back to 2 (percent) to 4 percent target by 2019,” Diokno said during the weekly “Breakfast with Ben” briefing.

The budget chief said they are also calling for the cooperation of manufacturers not to hike the prices of goods if there is no reason for them to do so. For some months now, the rate of price increases registered acceleration due partly to a surge in rice prices, which indicated the need for the passage of the rice tariffication measure, which President Rodrigo Duterte has certified as an urgent bill.

Diokno said economic managers are confident that lawmakers would approve the measure but also said that “if they don’t, we will be operating on a slightly higher inflation even for 2019.”

He said rice inflation accounts for 0.7 percent of the over-all inflation, to date, but he expects this to go down in the coming months because of the harvest season. “Things are changing because it’s harvest season. Rice importation has arrived so we expect price of rice to be tamer than before,” he added. PNA




 

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