Finance chief backs additional imports of rice, corn, sugar

THE DEPARTMENT of Finance (DoF) is recommending additional imports of rice, corn, sugar, pork, and other key commodities this year to address an expected supply deficit and to tame prices.

“The total rice deficit of the country is estimated at 1.8 million metric tons (MT) or 10.4% of demand this year. This rice deficit, which is equivalent to 42 days, must be met with additional buffers in anticipation of typhoons that could destroy potential harvest,” Finance Secretary Benjamin E. Diokno said at a sectoral meeting with President Ferdinand R. Marcos, Jr. on Tuesday.

A copy of his presentation was provided to journalists.

The Finance chief said the government should import 3 million MT of rice to secure a 30-day buffer, but noted this should not coincide with the harvest season.

The Philippines imported around 3.8 million MT of rice last year.

Citing estimates from the DA, Mr. Diokno said yellow corn is also seen to have a deficit of 2.8 million MT this year. This is equivalent to 34.7% of total yellow corn demand and almost 125 days of feed requirements.

“This must be addressed through temporary and timely importations to avoid affecting the production of other industries such as hog and poultry,” the Finance chief said.

For refined sugar, Mr. Diokno said that there will be a deficit of 75,546 MT by the end of August 2023. This represents 6.4% of total demand.

He said the supply of refined sugar will be insufficient if there are no new imports, driving up retail prices.

Mr. Diokno said there is an estimated pork supply deficit of 309.1 thousand MT (TMT), equivalent to 17.1% of demand or 62.5 days of pork supply.

“To fulfill the 2023 supply deficit and maintain at least a 30-day buffer stock of pork in 2023, the DA estimates that the country needs to import around 457.5 TMT of pork,” he said.

The DA also anticipates a fish supply deficit of 648.3 thousand MT or 18.1% of demand by the end of the year.

“There is a need to continue calibrated importation of fish to ensure local availability of the commodity at more affordable prices while the municipal and coastal/marine fish resources are enriched and revitalized,” Mr. Diokno said.

He noted inflation has continued to quicken due to food supply shortages and higher utility rates.

Headline inflation eased to 8.6% in February from the 14-year high of 8.7% in January, while core inflation accelerated to a more than 22 year-high of 7.8% during the month.

Food inflation slightly eased to 11.1% in February from 11.2% in January, due to a slower rise in prices of vegetables, rice, corn, meat and sugar.

However, there were higher annual increase in prices of flour, fish, milk, fruits and ready-made food.

In a televised Palace briefing, Mr. Diokno said that there is a need to focus on agriculture production and productivity to help bring down prices.

“I emphasized that in order to tackle inflation we need to have a whole of government approach…We need to focus on (bringing down) prices of commodities,” Mr. Diokno said.

He said the government needs to trim the processes and procedures that delay the transport of imports. This includes fast-tracking government processes on clearances for agricultural goods, removing the certificate of necessity to import for fish, digitizing and centralizing the sanitary and phytosanitary (SPS) import clearance system, implementing the equivalence principle for the SPS agreement, and removing the required Authority to Release Imported Goods on fertilizers and feeds ingredients.

The country will also import more fertilizers from Saudi Arabia and China, Mr. Diokno said.

The DA is currently negotiating with the Saudi Fund for Development for urea fertilizer this year, while the Department of Foreign Affairs will apply for more development assistance from China for fertilizer imports.

NEW COMMITTEE
In statement, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said Mr. Marcos has approved the creation of an Inter-agency Committee on Inflation and Market Outlook that will serve as an advisory body on measures to “mitigate inflation and ensure food and energy security.”

“The advisory body will lead the close monitoring of inflation (particularly on food and energy and their main drivers and causes), facilitate regular and efficient data-sharing among concerned agencies, assess the supply-demand situation for energy and essential food commodities, provide forward estimates given various scenarios,” he said.

Co-chaired by Mr. Diokno and Mr. Balisacan, the committee will also monitor global and regional developments that may affect commodity prices. It will submit quarterly reports to the President on the food and energy supply-demand situation and outlook for the country.

Mr. Marcos also approved the creation of an Economic Development Group, which will “assist the Executive department in harmonizing, coordinating, complementing, and synergizing the efforts that will ensure the country’s rapid, inclusive, and sustained growth.” — Luisa Maria Jacinta C. Jocson