Amid high inflation, government allots funds in Philippines

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The government will provide a total of P26.6 billion in ayuda or subsidies to vulnerable sectors to help them cope with the rising prices of food and other commodities, Finance Secretary Benjamin Diokno said yesterday.

Of the amount, P9.3 billion would be allotted to targeted cash transfer, P3 billion to fuel subsidy for the transport sector, P1 billion to fuel discount for farmers and fisherfolk, and P13.3 billion to fertilizer discount voucher program.

At a Palace briefing, Diokno said the P1,000 ayuda would be provided to 9.3 million poorest households for two months.

'We have identified where to get the money and maybe in a few days or in a few weeks we will be able to give it to those affected by inflation,' he said partly in Filipino.

'The funding source will come from of course, tax collection,' he added.

Diokno clarified that the 9.3 million families were also the beneficiaries of the previous financial assistance under the Department of Social Welfare and Development's Targeted Cash Transfer Program.

'These are the old recipients, we will not come up with the new list,' he said.

The Department of Budget and Management earlier announced the P4 billion fuel assistance for transport and agricultural workers this year.

Asked how soon the transport, farmers and fishers sectors would receive the assistance, Diokno said under the special provision of a fuel subsidy program, the funds would be released when the average Dubai crude oil price based on Mean of Platts Singapore or MOPS for three months reaches or exceeds $80 per barrel.

'It (fuel subsidy) is not yet justifiable…If I remember right, the prices of crude oil reached $110 dollars per barrel last year. But now, the price is going down in the world market especially since China announced they are only targeting 5.5 percent growth,' he said.

'So, let's see. It's better for the price of oil to go down than to give a subsidy, isn't it? So, it benefits everybody,' Diokno said.

The country's inflation dropped from 8.7 percent in January to 8.6 percent in February.

'This means that it (inflation) has leveled up, maybe it will slide down, and that we forecast that maybe by around October, it will go down to four percent, the BSP (Bangko Sentral ng Pilipinas) is expecting two to four percent level,' he said.

'Our economy is sound even if inflation is high. Consumption is not that affected,' Diokno said.

'Inflation is high relative to what we had in the last 10 years but the economy is okay. We don't expect the economy to slow down,' he said.

New committee formed

Diokno also said President Marcos has created an inter-agency committee that would recommend measures on inflation and importation.

The finance chief said the Inter-agency Committee on Inflation Market Outlook would be a permanent committee whose task is to come up with the demand and supply situation and to submit monthly reports to the President.

Diokno and National Economic and Development Authority (NEDA) director general Arsenio Balisacan will chair the committee.

According to the finance chief, there were instances when the timing of the importation was wrong because the imported commodities arrived during harvest time.

'We said we need an early warning system,' Diokno said.

'The forecast should be a scientific, science-based forecast. It is easy to forecast production. You can use your satellite to check if they just planted, you would know how many (hectares) had been planted, so you will see the development. If there are typhoons, you can see it through satellite. So we will use that kind of model to forecast,' he added.

Budget Secretary Amenah Pangandaman will serve as vice chair of the committee, which will also be composed of the agriculture, trade, energy and science departments. The BSP and the Philippine Statistics Authority will provide the committee's resource persons.

Economic managers have also recommended the creation of the Economic Development Group, whose main role is to address the country's economic concerns.

Diokno will also be the chairman of the group, which will be similar to the previous economic development cluster. It will be composed of the Presidential Management Staff, NEDA, trade, budget, agriculture, public works, transportation, information and communications technology, energy, science, interior and local government and labor departments. The NEDA will be the secretariat of the committee.

Priority bills

Noting that food is one of the sources of inflation, Diokno said economic managers have identified priority measures aimed at enhancing farm productivity.

He said the New Agrarian Emancipation Act - approved on final reading at the House of Representatives and on second reading in the Senate - aims to condone the loans of agrarian reform beneficiaries.

'This will allow farmers to focus now on their efforts to increase production rather than think of ways to pay for their land,' the finance chief said.

Economic managers are also pushing for the National Land Use Act, which will set aside land for agriculture and prevent it from being converted for other uses. The bill is pending at the committee level in both legislative chambers.

Also in the list of priority bills for the agriculture sector is the livestock development and competitiveness bill, which seeks to replace the minimum access volume system on corn with a uniform five percent tariff rate. The measure is also pending at the committee level in both houses of Congress.

Economic managers have also proposed amendments to the Philippine Crop Insurance Corp. charter, a measure approved at the committee level at the House but is pending in the government corporations and public enterprises committee of the Senate.