“Food, feed, and fuel:” Salceda recommends series of Executive Orders to respond to inflation

October 6th, 2022

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) sent President Marcos a series of recommendations to respond to higher prices, as September 2022 figures showed that inflation accelerated to 6.9%.

In a memorandum for the President, titled “Food, Feed, and Fuel: Analysis and Recommendations on the September 2022 Inflation Rate,” Salceda recommended that President Marcos issue a string of Executive actions to ensure that price growth is contained.

“The problem is primarily in food, feed, especially corn, and fuel. These are the most essential components of the basket of goods. And they are vulnerable, to some extent, to global price volatility due to imports.”

“Food (around 25%), fuel (up to 90% in net imports), and feed (around 21% for corn). Rising USD/PHP exchange rates (which this representation has projected to go as high as P65-86/USD before it settles and gradually declines over the next 12-24 months), continuing recovery of global demand, higher input costs (fertilizers and fuel) and supply constraints due to global climate conditions remain threats to both availability and affordability of the country’s food, feed, and fuel supply,” Salceda warned

“Ceteris paribus, we project that every 1% increase in USD/PHP prices translates to between 0.1 to 0.4% increase in overall prices, depending in the overall import mix. This can be offset by lower overall domestic prices – which makes a surplus and lower costs of domestic food production, as well as adequate supply of indigenous energy critical.”

Salceda also warned that higher prices could lead to smuggling, and pointed out the need for better inter-island transport linkages.

“Higher domestic prices in Mindanao will raise the incentive to intensify the use of traditional “Southern backdoor” smuggling mechanisms. Based on this representation’s discussions with officials of the Bureau of Customs, the items suspected to be most susceptible to smuggling are tobacco products, fuel, and vegetables,” Salceda wrote.

“Higher prices in Visayas continue to highlight vulnerabilities in inter-island transport, especially as food prices remain significantly above the national average in Visayas (9.2% inflation in Western Visayas, 9.8% in Central Visayas, and 7.7% in Eastern Visayas, versus the national food inflation of 7.4%)”

Salceda summarized his recommendations as ensuring domestic food supply, lowering the costs of imported feeds and input products such as sugar, and optimizing the use and supply of indigenous energy sources to lower dependence on imported oil.

Salceda’s recommendations are as follows

On food

1. EO directing the inventory and release of all procured and available financial and material resources for agriculture, as well as expeditious completion of all pending procurement for agriculture, may be issued.
2. EO ensuring that all supply bottlenecks for food and other farm producer are eased may also be issued.
3. AO directing Local Government Units to lift all hindrances and blockages across farm-to-market routes
4. AO directing the Department of Transport to ensure the proper flow of traffic feeding into inter-island nautical routes.
5. EO directing that all schools and barangays undertake community edible gardening programs
6. Conduct of food processing and storage trainings for farmers to manage food surpluses
7. Revival of the vermiculture for animal feed under President F.E. Marcos
   On feeds and imported products
8. Lower tariffs for imported cornto 5% (or raise minimum access volume).
9. Increase current 150,000 MT import program for refined sugar, but under an auction system to reduce price differential and generate revenues for domestic sugar sector support.

On fuel and indigenous energy sources

1. Ensuring that hydropower dams are able to produce optimally through desilting
2. Increasing the production of domestic coal and considering the temporary or managed relaxation of the Department of Energy (DOE) moratorium on the expansion of power plants employing domestic coal
3. Issuing an Executive Order expediting the local and national approval of necessary permits for solar, wind, and other renewable energy projects
4. Issuance of amendments to Implementing Rules and Regulation of RA 9513 of the Renewable Energy Law to lift foreign ownership restrictions to renewable energy generation