MANILA, Philippines — President Ferdinand “Bongbong” Marcos Jr.’s Chief Economic Officer said Friday (July 15) that food imports to increase supply and targeted subsidies to the most vulnerable sectors would mitigate high global inflation that is building up. would spread to the Philippines.
“We have a comprehensive set of interventions to effectively balance the need to maintain growth momentum while containing inflationary pressures and their cascading effects on the economy,” Finance Secretary Benjamin Diokno told a meeting. finance ministers and central bank governors from the G20.
While the Philippines is not part of the G20 grouping of global economic giants, Diokno was invited to attend as a guest by Indonesia, the host country for this year’s meetings.
To keep food prices accessible, Diokno said the government wants to increase agricultural production while maintaining the import of certain products like corn, pork and rice, at lower tariffs under the executive decree ( EO) No. 171 by former President Rodrigo Duterte in effect until this year. end.
In addition, “targeted subsidies have been allocated to cushion the impact of rising fuel prices on the public transport sector,” Diokno said. For this year, the previous Duterte administration earmarked a total of 47.5 billion pesos in financial aid for those most affected by the oil price spike – 41.4 billion pesos in unconditional cash transfers at half the poorest of the population, 5 billion pesos in fuel subsidies for drivers and operators of public utility vehicles (PUVs) and 1.1 billion pula in fuel rebates for farmers and fishermen.
To date, the Department of Budget and Management (DBM) has already released 16.7 billion pula of these subsidies, financed by windfall revenues from additional import duties and taxes collected on expensive fuel. But with the economy expected to fully recover by the middle of this year, those grants will no longer be given next year, Diokno said last week.
During the G20 meeting, Diokno also pointed out that “the Bangko Sentral ng Pilipinas (BSP) has been decisive in taking the necessary monetary policy actions to stop the rise in inflation”, referring to the series of price hikes. interest rate, including the off-cycle cycle. 75 basis points (bp) increase in the key bank lending rate to 3.25% last Thursday (July 14).
Although not yet peaking, headline inflation averaged 4.4%, above BSP’s target range of 2-4% manageable price increases conducive to growth. economy, in the first half of 2022.
“With these policy instruments and a medium-term fiscal framework in hand, we are confident that the pain from the ongoing shocks will be short-lived and our recovery will remain robust,” Diokno said.
“The government’s medium-term fiscal framework aims to reduce the fiscal deficit, promote fiscal sustainability and enable robust economic growth,” Diokno said.
“It contains short- and medium-term strategic plans for socio-economic development, which will be presented in detail to the public by President Marcos Jr. in his first State of the Nation address (Sona)” on July 25 , added Diokno.
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