Imports and inflation, what’s the plan Mr. President?

Marcos Jr. put the agriculture sector among top administration priorities in the face of a growing food crisis. (Photo: Jonathan Cellona, ABS-CBN News)

The Philippines’ importation plans were discussed at the first official Cabinet meeting under the Marcos Jr. administration on July 5.

The economic planning team of Finance Secretary Benjamin E. Diokno, Bangko Sentral ng Pilipinas Governor Felipe M. Medalla, and Socioeconomic Planning Secretary Arsenio M. Balisacan led the meeting to lay out the economic plan that will act as the central policy for the other administration departments. The administration is yet to complete the roster of Department chiefs.

The four-hour meeting was supposed to be livestreamed but only five minutes were aired on Radio Television Malancañang’s Facebook page. After the meeting, Marcos Jr. faced members of the press to relay their discussion.

Inflation from outside

First, inflation (Because that’s all everyone is talking about).

Hours after the Philippine Statistics Authority reported the Philippines hit a 6.1% inflation rate for the month of June, Marcos Jr. said “would have to disagree with that number. [The inflation rate] is not that high.”

According to Finance Secretary Benjamin Diokno, this was “misunderstood” as Marcos Jr. denying the inflation rate flat out. Rather, what he meant was that the Chief Executive was referring to the full-year forecast of 4.4% which Marcos Jr. projects the country will surpass.

“The forces that have pushed the commodity prices up are, again, beyond our control. Much of our inflation is actually imported inflation,” Marcos Jr. told reporters. Philippine inflation is affected by the inflation of products imported from overseas.

Both Diokno and Marcos Jr. agree that high inflation rates are a worldwide problem. The Thai economy saw 7.7% inflation in June, Indonesia’s overall figure hit 4.4%, and the United States reached a record 8.6% in May. The US Dollar continues to gain against other currencies, fuelling worries about a looming global recession. 

Analysts have called on the Bangko Sentral ng Pilipinas to respond in equal force to the US Federal Reserve’s rate hikes before it is too late for the Philippine Peso.

Mouths to feed

A key talking point during the presscon was Marcos Jr.’s emphasis on aiding the domestic agricultural sector through the food crisis. Much like fuel, food prices are directly affected by the global market, which Marcos Jr. described as “variables outside of our control.” The administration looks to shift away from import dependence and towards more local production. DA’s short-term plan for the next six months is to increase production of rice and corn.

This solution–idealistic and a familiar campaign promise at its core–will take time.

There must also be a concerted effort to streamline the bureaucracy of the agricultural sector, a goal the Marcos Jr. administration has set for itself. More research and development projects must benefit farmers, fisheries, and poultry and hog raisers. 

It’s worth noting that the Philippines is not exactly fertile land for rice production at only 4.8 million hectares. Nueva Ecija farmers can produce a kilo of rice for less than P13, almost double the price of our Southeast Asian neighbors. During a meeting with members of the Department, Marcos Jr. asked agency officials to present evaluations of the rice tariff-ication law.

Unfortunately, chicken and pork remain on the importation list as feed supply issues and African swine flu remain rampant in the country.

Chicken supply has been an issue in Southeast Asia for the past few months. Malaysia implemented an export ban in early June to address high domestic demand, impacting neighbor Singapore who began importing from Indonesia. In the Philippines, beloved fast food chains Jollibee and McDonald’s announced that chicken products would not be available at all branches.

Marcos Jr. has pledged to put the agricultural concerns of the country as top priority to build a more robust economy. With the pandemic and war-battered world economy hurtling towards recession, ensuring Filipinos have food on the table and money to keep the lights on will be a long fight.