By Corina Oliquino i FilAm Star Correspondent
MANILA — In a meeting with Filipinos in Jordan on September 9, Duterte blamed President Donald Trump’s tariffs and protectionist trade policies for record-high inflation in the country.
“When America raised [tariff] rates [imposed on Chinese goods] and interest rates, everything went up,” Duterte explained.
But in a report by the Philippine Star, Duterte’s claims seem to contradict figures from the Bangko Sentral ng Pilipinas (BSP).
According to BSP, the country’s inflation has risen for the eighth consecutive month to 6.4 percent in August – its fastest pace since the 6.6 percent recorded in March 2009.
The August record also exceeded July’s 5.7 percent and topped the BSP’s “worst case scenario estimate.”
BSP Gov. Nestor Espenilla Jr. said the faster-than-expected inflation was due to “food supply shocks,” specifically in the rice market, which he said, cannot be mitigated by adjusting the Central Bank’s benchmark rates.
“An unfortunate confluence of cost-push factors continue to drive consumer price inflation in August beyond the acceptable target range,” Espenilla said, adding that elevated oil prices, a weakening peso and “strong” domestic demand prompted inflation last month.
“These warrant more decisive non-monetary measures to fully address.”
In another report by The Philippine Star, Senate President Pro Tempore Ralph Recto said Trump and other global factors should not be blamed for the country’s rising inflation, explaining that it was largely triggered by the Duterte administration’s policies.
“World events, external factors are a given. That’s always the case. We must anticipate. In any situation there are both opportunities and threats. A big part of our inflation problem is self-inflicted. They are internal,” Recto said in a text message to The Philippine Star.
Recto added the continued depreciation of the peso is also a major factor in the increased price of commodities.
“The Duterte government can no longer afford to continue intervening in the agriculture sector, particularly subsidizing rice and other crop production,” Recto, who served as head of the National Economic and Development Authority, added.
Recto also suggested various policy measures to combat or slow down inflation, such as: incentivizing private sector investment and credit to agriculture to increase productivity, speeding up the granting of land titles to farmers while allowing land consolidation, reducing tariffs on agri products and pushing private sector investment in technology and mechanization in the sector.
Moreover, Recto noted that the BSP can also improve its management of both interest rates and exchange rate.
Recto also urged the Department of Finance to ask Congress to temporarily halt the second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2).
“(TRAIN 2’s) bad timing. The looming trade war and conflicts around the world will affect the global economy. I suggest our economic managers anticipate both threats and opportunities,” Recto said.
U.S. Embassy silent on Duterte’s claims
“I would only say we are proud of the economic cooperation and the contributions U.S. companies make to the Philippines, providing quality jobs and products,” U.S. Embassy Spokesperson Molly Koscina said in an e-mail to The Philippine Star.
“U..S companies are the country’s largest employer and largest exporter,” Koscina added.
Meanwhile, in the same report, labor group Partido Manggagawa (PM) has accused President Duterte of “wasting his time and power in neutralizing his political opponents” rather than arresting the “deluge of high prices.”
In a statement, the group’s chair, Renato Magtubo, said workers are more concerned over the devaluation of their wages than the “missing amnesty files” of Sen. Antonio Trillanes IV.