Soaring fuel prices mean higher logistics costs, which are passed on to consumers, affecting all basic commodities starting with food.
Inflation already accelerated to 4.1 percent as of March, from just 2.4 percent in February, amid the Middle East conflict.
To stabilize food prices, the government is reportedly considering zero tariff for meat imports. This drew an immediate reaction from local producers particularly of poultry. They warned that farmgate prices are currently down due to an oversupply of chicken and eggs, and a flood of imports could destroy their livelihoods amid the economic difficulties arising from the ongoing national energy emergency.
Inflation is a sensitive issue for this administration. All surveys have consistently shown President Marcos and his government getting the lowest marks in taming inflation, which has long been driven by the food component.
Throughout the national emergency, the President has repeatedly reassured the public that the country has sufficient supplies of food. The cost of transporting food, however, from farm to market has become so prohibitive that farmers in certain areas have opted not to sell their produce.
In considering zero tariff to flood the market with imports, the government must balance any projected benefit from such a move against the health of domestic farm production.
Already, the agriculture sector is feeling the impact of rising fertilizer prices due to the Middle East conflict. The country, which is heavily dependent on imports of its urea needs, faced this problem when Russia invaded Ukraine in 2022, disrupting global supply chains and affecting fuel prices.
Fishery has also been affected, as small fishing boats use diesel or gasoline. The government, however, has shown great reluctance to suspend or even reduce fuel taxes to provide immediate relief to the majority of the population. While holding on to its windfall taxes, it has instead opted for supposedly targeted subsidies, whose implementation has been inefficient.
Now it’s considering flooding the market with imported food items. Before proceeding with this measure, the government must ensure proper consultation with the stakeholders.