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Philippines: More imports, tariff cuts to temper inflation – NEDA
MANILA, Philippines — The government’s decision to reduce tariffs and bring in more imported pork are expected to temper the continued rise in consumer prices.
The National Economic and Development Authority (NEDA) said inflation may start easing this month as the temporary reduction in tariffs and increase in the minimum access volume (MAV) for pork imports may start yielding positive effects this month.
This after headline inflation – the rate of increase in the consumer price index – remained at 4.5 percent in May.
While the overall inflation was unchanged, pork inflation still climbed to 58.4 percent in May from 57.7 percent a month earlier as prices remain high due to tight supply in the local market.
Meat inflation remained the main driver of the headline rate with a 1.4-percentage point contribution.
“We expect to gradually see the benefits of Executive Orders 133 and 134 in the coming months to help curb pork prices and provide relief to consumers and households,” Socioeconomic Planning Secretary Karl Chua said.
“As we reopen our economy, we will continue to work to keep other drivers of inflation stable to ensure Filipinos recovering their jobs and income will not see their income eroded by higher prices,” he said.
The lower prices of rice, vegetables, fruits and corn also offset the increments in pork prices. Rice inflation further decelerated to 0.8 percent. Vegetables and fruits also recorded a slower price uptick.
Apart from slashing the tariffs on pork, President Duterte also ordered the temporary tariff cut on imported rice to 35 percent from the previous 40 to 50 percent.
Chua said this was a proactive move to diversify market sources and augment rice supply amid the increasing global rice prices in order to minimize future rice inflation pressures.
“In managing inflation, our priority is to improve our domestic production and provide needed support to our farmers and producers. When necessary, we will augment supply with importation to keep prices stable and guarantee food security,” Chua said, adding that “this balancing act will help us better manage the impact of inflation on the people.”
Source: https://www.philstar.com/business/2021/06/06/2103363/more-imports-tariff-cuts-temper-inflation-neda