Pernia cites need for gov’t to exercise control over inflation

Intervention is needed to address the uptick in inflation given its implications on consumer prices and economic growth, Socioeconomic Planning Secretary Ernesto Pernia said Thursday.

“For consumers, we need to address sources of rising inflation, even if the uptick brought by the temporary effects of TRAIN are expected to gradually ease this year,” he said in a press conference in Pasig City.

TRAIN, or the Tax Reform for Acceleration and Inclusion Act, was signed into law by President Rodrigo Duterte in December, reducing the personal income tax rate and expanding the value-added tax (VAT) base.


Pernia said consumer prices are set to benefit should Congress push through with the lifting of the quantitative restrictions (QR) on rice imports.

“We continue to pressure Congress to amend Republic Act 8178 or the Agricultural Tariffication Act,” he said.

“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 P7.00 per kilo. This will increase the purchasing power of low-income households, aside from bringing down inflation,” he the Cabinet official noted.

Earlier this month, Pernia said the surge in consumer prices would be temporary and would normalize towards the end of the year.

Aside from its impact on consumer prices, Pernia said inflation must be closely monitored for putting a drag on economic growth during the first quarter.

“If not for the first quarter 2017 to the first quarter 2018 rate of increase in inflation, real GDP growth would have been well within our growth rate targets of 7.0 to 8.0 percent,” he said.

Asked for additional details, Pernia said the first-quarter economic growth should have registered within the government target of 7 to 8 percent, instead of 6.8 percent.

“Just a small digression in case you are interested in a small secret: If not for the first quarter 2017 to the first quarter 2018 rate of increase in inflation, real GDP growth would have been well within our growth rate targets of 7.0 to 8.0 percent,” he said in a separate statement.

“So, inflation is the spoiler, that is why we really need to focus on inflation especially because it is the number one concern expressed by Filipinos in surveys, by SWS or Pulse Asia,” Pernia noted. —VDS, GMA News