The finance ministry recommends that the government reform the food supply chain to keep prices affordable in 2022 and avoid calls for wage increases that could lead to pressure on supply and a flight of food. capital.
âFood price inflation is a significant socio-economic problem, as food accounts for a large part of the budget of the poorest households. As food price inflation persists, calls for wage increases multiply, which, if realized, could fuel further inflation on the supply side and, in turn, discourage investment, âhe said. Under Secretary of Finance and Chief Economist Gil Beltran said in an economic bulletin.
Based on DOF calculations, inflation averaged 2.66% from 2013 to 2020, while food prices increased 3.33% during the period. Over an eight-year period, food and beverages contributed 1.3 percentage points to inflation, with food accounting for 1.21 percentage points. In October, food and beverages accounted for about half or 2.23 percentage points of average inflation of 4.5 percent.
Beltran said rice was the biggest source of inflation risk before the government converted import quotas into tariffs through the passage of the Rice Trade Liberalization Law. “The price of rice has since stabilized and has partially mitigated the effects of the most recent sources of inflation spikes – fish, meat and vegetables – due to supply disruptions caused by weather disruptions and disease.” , added the finance manager.
Going forward, it is recommended that the government revise the food supply chain to stabilize both prices and supply. The DOF is pushing for legislation to improve the food warehousing and storage industry.
âThe Warehouse Receipt Bill, which was passed by the House of Representatives and then submitted to the Senate, will help professionalize the warehousing industry and contribute to food safety,â Beltran noted.
A stronger supply chain, especially for essentials like food, will certainly benefit Filipinos by improving food security in terms of storage and distribution. Economists like falling inflation as an indicator of a well-run economy, while Juan dela Cruz will appreciate his government’s efforts to keep the cost of living in the Philippines as manageable as possible. *