A partylist commended the Monetary Board for raising again the policy rates that effectively slowed down inflation in the latter part of July.
Probinsyano Party-list Rep. Alfred C. Delos Santos commended the Bangko Sentral ng Pilipinas (BSP) for raising policy rates by half a percent or 50 basis points effective today.
The most recent rate increase of 0.75 percent or 75 basis points which went into effect last July 14 was successful in containing inflation by keeping the July 2022 inflation from exceeding the Philippine’s average rate of 6.4 percent. If the BSP did not step in, the inflation last July would have increased closer to 7 percent which would result in more severe economic and social suffering for the Filipinos.
But the July rate hike required a response, and it became effective only for the second part of that month. The combined effect of July and August rate hikes could lower August’s inflation to 6 percent, only if consumer price index goes down or even remains steady or does not rise significantly.
BSP’s actions towards inflation are significant especially in the provinces as the economic suffering bought by inflation is harder there.Through the rise of the BSP lending rates, the extra cash being rotated by large businesses has reduced the cost of money which smaller businesses and Filipino families can benefit from.
Another good impact of BSP’s action is it helped keep the peso from further depreciating against the US dollar. There was a genuine threat that the exchange rate would jump sharply to P56–P57 against the US dollar. That would have been devastating for many industries, including those that contribute significantly to employment, such as ecozones and industrial estates, as well as those that export goods with high import content, he said.
The current exchange rate at P55+ to $1 is beneficial to OFWs’ dependent families, BPO employees, and employees of export companies with low import content.
“Nananawagan ako sa Bangko Sentral na bigyan ang mga bangko at credit card companies ng regulatory relief sa kanilang credit card receivables kapalit ng pagtaas ng interest payment rates sa credit cards. Nakakatulong kasi ang regulatory relief sa pagbaba ng administrative at financial transaction costs. Hikayatin din sana ng BSP ang pagtapyas sa ATM transaction costs at tulungan ang Landbank, OFW Bank, Veterans Bank na palawakin ang kanilang ATM network upang hindi na magbayad ng mas mataas na ATM charges ang mga kliyente ng mga bangkong iyan kapag ATMs ng ibang bangko ang kanilang ginagamit,” he added.
Delos Santos said he is also observing the sugar prices which are the main concern, especially of consumers, bakeries, eateries, restaurants, and food manufacturers. Sugar has also been one of the most commonly- used ingredients and a key ingredient in different baked goods, soft drinks, soya, and even catsup and other ready-made sauces. Because of that, users are worried about their sugar raw material cost because of its high price.
Reduce cargo rates
To answer this problem, Delos Santos asked the Department of Transportation (DOTr) to temporarily suspend administratively at least 50 percent of cargo rates and passenger terminal fee rates charged by seaport and airport authorities.
He also asked the Bureau of Customs to temporarily suspend cargo fee rates, administratively. The combination of these offers would lower transportation costs thus helping reduce the price hikes, especially in foods.
With the passage of House Concurrent Resolution No.2 which was approved last August 1, the macroeconomic objectives that support the national budget have been established. The key to meeting the Medium- Term Fiscal Targets is reducing inflation, which can be done through carefully calibrated lending rate management.
Tags: #Probinsyano, #Inflation, #FoodHike, #Solutions, #Province