Price stabilization is a must

Almost just everybody just can’t stop talking about inflation, or in more layman terms, rising prices. And even if the government attributes this to rising oil prices, the typhoons, and almost anything that can be blamed, the painful ouch is for everyone to feel.

Unfortunately, inflation affects every Filipino. While salaried workers felt a small measure of joy when personal income taxes were reduced because of the tax reform law or TRAIN at the start of the year, that has been whittled away by the continued rise in food prices the last three quarters.

Worse, majority of our countrymen who don’t receive wages have felt the harsher reality of galloping inflation. Since 60 percent of the poor’s household budget goes to food, experiencing how rice prices have risen the last few months has never been so hurting.

It does not help that the current economic team continues to deny the existence of a potential crisis – if this has not already turned into a true crisis.

The President must show that he is on top of the situation by making price stabilization his top agenda over the next few months until the inflation rate stops climbing and returns to the pre-TRAIN levels of two to four percent.

Scaling down

It’s too late now to stop the implementation of TRAIN, especially that which pertained to increasing taxes on petroleum products. Yet, there must be a way to delay the second – and perhaps, even the third – rounds that are due to happen in 2019 and 2020.

Being a country that is heavily dependent on imported fossil fuels, the economy is just too sensitive to any movement of global crude oil and petroleum products, and increased taxation is just the worst way to exacerbate an allergic reaction.

Scaling down Build Build Build (BBB) may also be in order. After all, most of the tax reform initiatives that the government envisioned were to raise revenues for an ambitious infrastructure build-up expected to propel the economy to higher levels.

If such tax initiatives were to stoke up inflation and imperil economic growth, then new roads, bridges and ports would mean little. The economy is on the verge of a take off, and our economic planners must be doubly careful to make this as smooth as possible. Let’s not shoot ourselves in the foot.

Rice self-sufficiency

The recent importation of cheap rice by the National Food Authority (NFA) is now making its way to many markets that badly need it. But extra care must be adopted to ensure that these do not end up being mixed with commercial rice, and therefore not ending up benefitting the poor.

On a longer term, a policy on rice importation with an acceptable taxation scheme must be passed that will protect our rice farmers while ensuring that the country will have adequate amount of rice even in the face of natural calamities.

The taxes collected from rice tariffs must be channeled to a mechanism  that will truly benefit our rice farmers. This includes having a program that will rebuild our farm infrastructure, including irrigation channels and farm-to-market roads, improve existing rice farming technologies to bring yields up and costs down, and transform our rice farmers to become more savvy about farming, both in terms of technology and financial management.

A breakthrough in rice self-sufficiency must be achieved. This, for me, would be one of the best legacies that the current administration would be able to leave the nation.

While at it, why not look at extending this concept of self-sufficiency to other food sources, like vegetables, fruits, fish, poultry, pork, and beef?

Beyond free WiFi

We move to a topic we started last week. Bringing the internet to every barangay in the country is turning out to be a bigger challenge to the Department of Information and Communications Technology (DICT).

The initial cost to government is already substantial, but the returns in terms of providing a stimulus to economic growth are not guaranteed without the proper support facilities and software interventions.

In the field of education alone, while the DICT is sorting out problems that have slowed down its goal of providing more than 4,500 public schools and close to 900 state universities with internet connectivity, this should not be the only concern.

More importantly, schools and universities must be ready to use the internet lines. This means having the right computers installed, teachers who will be able to teach lessons through a digital media, and having enough technicians who will provide the support to keep the facilities running.

Better use for connectivity

This is the same with bringing connectivity to national and local government offices, public hospitals and rural health units, and seaports, airports and train stations. Free WiFi that the general public can access should not be the end goal alone.

The infrastructure, with an approved budget of P6.5 billion alone this year, is already costly, but both the local and national government must be prepared for the additional cost of support services that internet connection entails.

While this also means having qualified technicians that will ensure internet reliability and security in connected sites, having government offices maximizing the infrastructure to improve their services should also be on the agenda.

This means looking at acceptable database and accounting systems that can be used by more local governments, as well as having a single system for all national government units.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.