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Gatchalian champions counter-inflation agenda

PASAY CITY, Philippines – Senate Committee on Economic Affairs chair Senator Win Gatchalian speaks to the press after wrapping up a hearing with key economic stakeholders on inflation issues, 26 Feb 2018. Gatchalian is proposing a menu of counter-inflation measures to help protect the purchasing power of the poor. Photo by Mark Cayabyab/OS WIN GATCHALIAN

Senator Win Gatchalian is championing a four-step “counter-inflation agenda” to combat the impact of rising commodities prices on impoverished and working-class Filipinos.

January 2018 inflation was recorded at 3.95%, the highest January inflation rate since 2014 (4.24 percent). Among basic goods and commodities, food and non-alcoholic beverages were registered as having the second-largest inflationary increase for the year at 4.47%.

“The counter-inflation agenda consists of fast and responsive government actions that will shield our countrymen from the effects of rising inflation and prevent near poor Filipinos from slipping into hunger and poverty,” said Gatchalian, the chairman of the Senate Committee on Economic Affairs.

First and foremost, the senator called on the government to fast-track the full implementation of its expanded cash transfer program, which seeks to deliver an additional P200 in cash to the poorest 10 million families on top of the aid that many of them continue to enjoy under the 4Ps program. This program is already fully funded under the 2018 budget.

However, noting that the extra P200 per month would not be enough to fully protect the poorest Filipinos, he proposed three more action points to keep prices down.

One such action point is the implementation of a 10% discount on public transportation fare for the poor, while another is an additional 10% discount on rice.

To further drive down the price of rice, he also called for the abolition of the quantitative restrictions (QRs) that limit the volume of inexpensive foreign rice that can be imported to the Philippines.

“We have to remember that rice takes up the biggest budget of our poorest families, with almost 20% of their budget spent on rice. [The poor] are the first to feel the weight whenever price surges. We should help lessen their burden by making competition among rice importers more free-flowing,” the senator said.

According to Gatchalian’s estimates, the replacement of QRs with a reasonable 35% tariff would cause the average retail price of milled rice in the Philippines to decrease by almost 36%, from PHP 42 to PHP 27 per kilogram. Ultimately, this would result in savings of PHP 6,750 annually for the average household consuming 450 kgs of rice.

“Rice is the ultimate Filipino staple food. We eat it with every meal. Unfortunately, many Filipinos struggle to put enough rice on the table to feed their families because it has become so expensive. Replacing quantitative restrictions on imported rice with a moderate tariff will allow Filipino households to buy the rice they need at much lower prices. Because of this, they will be able to the spend the extra money they used to spend on rice to pay for other essential needs, such as shelter, clothing, medicine, and education,” he said.