Research group IBON said that faster inflation largely due to rising food prices hits poor households the worst.
The group also said that the Duterte administration’s proposal to increase food imports is short-sighted, and that the best defense against rising food prices and high inflation is to increase domestic food supply through long-term solutions that correct long-standing government neglect of agriculture.
This was mostly driven by worsening inflation in food and non-alcoholic beverages with higher rates among nine out of 11 commodity items in the index.
Prices rose fastest for vegetables (16 percent), corn (13 percent), and fish (11.4 percent).
According to the latest available data from the 2015 Family Income and Expenditures Survey, 59.7 percent of the expenditures of families in the bottom 30 percent income group was spent on food compared to just 38.8 percent for families in the upper 70 percent income group.
Rising prices will push more families into hunger and poverty, the group said.
IBON however said that while this could give some immediate relief it is only a short-sighted measure and the government is still failing to come up with long-term solutions to rising domestic food prices.
Yet the Duterte administration is proposing to increase food imports while cutting the Department of Agriculture (DA)’s proposed budget for 2019 by Php862 million, making it 1.7 percent lower than in 2018.
Domestic producers lacking government support are at risk of being undermined or displaced by cheap food imports.
Suspending the Tax Reform for Acceleration and Inclusion (TRAIN) Law will also greatly reduce inflationary pressures.
The group stressed that measures to increase farm productivity should immediately be implemented including providing irrigation, production and storage facilities, extension services, subsidized credit and marketing support, among others. #