March 1, 2023 – The National Economic and Development Authority (NEDA) maintains its resolve to address high inflation and sustain the country’s rapid recovery in the year ahead amid challenges in domestic and global markets.
On February 28, 2023, the Development Budget Coordination Committee (DBCC) briefed the House Committee on Appropriations on the country’s current macroeconomic situation and growth prospects in light of the economy’s persistent battle with high inflation. The DBCC discussed the impact and implications of rising inflation on the country’s fiscal and external position, growth targets, priority measures and budgetary allocation for targeted assistance projects, as well as policy thrusts of the national government.
The briefing was given by members of the Marcos Administration’s Economic Team, which includes NEDA Secretary Arsenio M. Balisacan, Department of Finance Secretary Benjamin E. Diokno, Department of Budget and Management Secretary Amenah F. Pangandaman, and Bangko Sentral ng Pilipinas Governor Felipe M. Medalla.
Among the matters also discussed were the welfare implications of the government’s recent importation policies on specific agricultural commodities. Balisacan said that by augmenting insufficient domestic food production, importation aims at curbing the adverse effects of high food prices and protecting consumer welfare especially for the poor and most vulnerable sectors, whose consumption baskets are largely constituted by food.
In particular, the NEDA Secretary recalled the favorable effects of the Rice Tariffication Law (RTL), a landmark reform passed in 2019, whose provisions for the liberalization of rice importation benefitted Filipino consumers.
“Kung titignan natin ang sources of food inflation in the last couple of months, hindi niyo makikita doon na ang isa sa mga commodities ay rice. It [RTL] has worked in moderating the increases in prices. Otherwise, if the rice sector was still the same — was still governed in the same way that we are doing now for meat, corn, and other commodities — makakasama iyong rice sa makikita natin sa inflation,” said Balisacan.
In the same vein, the Economic Team maintained that in tackling inflation and pursuing food security over the medium to long term, the easing of import restrictions requires the enactment of complementary measures for improving domestic agricultural productivity to raise the competitiveness of the sector.
Included in these short-term measures are actions to: address supply issues at every stage of the supply chain (from production to post-harvest facilities, logistics, importation, and anti-smuggling efforts); frequently monitor and update farm-gate and retail prices; estimate domestic production through the use of surveys and satellite data to enable timely decisions on importation that would help avoid the influx of imports during harvest season; develop a centralized database for the quick sharing of information and formulation of proactive policies; and support vulnerable sectors through the provision of targeted subsidies (such as fertilizer, fuel, and cash) and initiatives such as the Kadiwa program of the Department of Agriculture.
In their presentation to the House Committee members, the DBCC reaffirmed that the full-year 2023 target of 6 to 7 percent for gross domestic product (GDP) growth rate remains attainable so long as domestic risks, especially, are addressed. Balisacan also emphasized that the implementation of short- and medium-term measures must be aligned with the strategies outlined in the Philippine Development Plan 2023-2028 and enacted in a timely manner.