NEDA chief says bringing down price of agri goods could help improve GDP
Socioeconomic Planning Secretary Ernesto Pernia said the Philippines must push for structural reforms in order to bring down the rising cost of agricultural goods such as rice, fish, and vegetables.
This, as the country’s gross domestic product (GDP) for the first quarter grew only by 6.8 percent, which is lower than the expectation of a 6.9 percent to 7 percent growth.
“The more enduring solutions will require structural reforms. We continue to pressure Congress to amend Republic Act 8178 or the Agricultural Tariffication Act. The lifting of Quantitative Restrictions or QRs on rice should be pursued in earnest, as it will reduce the retail price of rice by as much as P4.00 to 7.00 per kilo,” Pernia said in a briefing held today.
“This will increase the purchasing power of low-income households, aside from bringing down inflation,” he added.
He also said the government needs to restructure the National Food Authority (NFA) to get rid it of its import monopoly and trading functions, so that it can focus on buffer stocking to meet emergencies.
This reform, according to him, is necessary for NFA to focus on its function of maintaining a national buffer stock for food security, and to refrain from rice trading to avoid distorting the market.
“Moreover, we also need to address rising prices of fresh fish, meat, and vegetables. As demand continues to increase with a growing population and expanding economy, reducing food inflation is necessary to increase people’s purchasing power,” Pernia said.
“To ease price pressures in agriculture (i.e. fresh fish, meat and vegetables), we need to promote productivity-enhancing measures. The sector needs efficient post-harvest processes, transport and logistic networks. The sector must also have increased access to innovative technologies and credit programs, particularly crop insurance, which could improve resiliency of farmers and fisherfolk from weather disturbances,” he added.
For investors, Pernia said efforts to reduce the cost of doing business and to ease or lift restrictions on foreign direct investment will be very important.
Easing restrictions in public utilities, retail trade, telecoms, and public procurement are also of high priority.