Diokno: Gov't should be 'more aggressive' in fighting inflation

Finance Secretary Benjamin Diokno said Saturday that the Executive Department has to be “more aggressive and focused” to tackle inflation, which reached a 14-year high in January.

In a statement, Diokno said the “main sources of inflation remain on the supply side, which should be the responsibility of fiscal authorities.”

“While evidence of second-round effects is increasing, the previous direct actions by government agencies have yet to work [their way through],” he said.
 
Diokno also said that “timely importation of food items in short supply is not enough” after the government made several initiatives recently, such as the additional importation of sugar and onions.
 
“There has to be a focused effort to ensure that the imported goods reach the intended markets as soon as possible. The Bureau of Customs should release the imported food items with the same sense of urgency that we have given the importation of COVID-19 vaccines,” he said.
 
“Local authorities should facilitate, not impede, the movement of essential food items to the intended markets. Restricting free movement of essential food items is one sure way of prolonging inflationary pressures.”
 
Meanwhile, Diokno said the government plans to form a small technical working group consisting of the National Economic and Development Authority, Department of Finance, Department of Budget and Management, Department of Trade and Industry, and Department of Agriculture “for an objective and timely assessment of supply and demand conditions of key food items.”
 
“This responsibility should be taken away from vested groups. This will help ensure timely actions to avert short-term upticks in food prices,” he said.
 
Diokno’s statement comes after the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) on Thursday decided to raise interest rates by 50 basis points amid inflation concerns.
 
BSP Governor Felipe Medalla said another hike is likely at the next policy meeting on March 24.
 
“The monetary authorities have done their part; the Executive Department, including LGUs (local government units), have to do more, be more aggressive and focused. In the fight against inflation, monetary policy is not the only game in town,” said Diokno, a former BSP chief.
 
“If the Executive Department succeeds in controlling the sources of inflation on the supply side more effectively, there will be less reason for monetary authorities to raise policy rates,” he said.
 
Inflation clocked in at a 14-year high of 8.7% in January, higher than the central bank’s projection of 7.5% to 8.3% and the target range of 2.0% to 4.0%.
 
The Monetary Board now expects inflation to average 6.1% this year. — Sherylin Untalan/VBL, GMA Integrated News