Inflationary move

September 27, 2018

You may ask: what or where is the connection here?

How does the shutdown of quarrying sites impact the movement of basic commodity prices upward?

The answer is quite easy: in a highly integrated economy, one adversely affected sector exerts pressure on the others, creating demand-supply squeeze that tends to push prices up.

And so the concern of a very discerning lawmaker is worth noting.

Sen. Chiz Escudero said a plan by the Department of Environment and Natural Resources to temporarily suspend quarrying activities in eight regions would only undermine government efforts to manage the country's high inflation.

"Amidst the government's efforts to control inflation, here is a policy decision from one agency that will erase whatever little gains they have achieved at reining it [inflation] in," Escudero said.

The Bicolano lawmaker cautioned the government on the effects of the DENR's move on the prices of commodities, particularly construction materials, as this may harm the administration's massive infrastructure spending project under the "Build, Build, Build" program.

"The basic problem is this will have inflationary tendencies on cement and aggregates, and will impinge upon the administration's 'Build, Build, Build' project, not to mention that it's sweeping and clearly arbitrary," Escudero said.

Last September 21, the DENR released a memorandum suspending quarrying operations in Regions I, III, CALABARZON, V, VII, X, XI and XIII, following the recent landslide incidents in Itogon, Benguet and Naga City, Cebu, which have so far left 78 and 56 people dead, respectively.

Moreover, the agency directed its regional offices to conduct an immediate safety inspection and geohazard assessment of the communities near mining and quarrying operations in their area to prevent a repeat of similar landslide incidents.

According to the DENR, the result of the safety evaluation would be the basis for the lifting of the temporary suspension.

Instead of hastily stopping the quarrying activities in all eight regions, Escudero said, the DENR should have conducted the safety and geohazard evaluation first since these mining and quarrying companies have already been granted operating permits by the department.

He also urged the DENR to address the problem as soon as possible by adding more teams that would inspect hundreds of quarrying sites all over the country.

"Magbuo sila ng singkwenta, otsenta, isandaan, dalawandaang inspection teams. Inspeksiyonin agad lahat sa loob ng isang linggo at kung sinong may violation, iyon ang ipasara. Pero wag namang ipasara agad habang hindi pa naiinspeksiyon. Mali naman yatang polisiya iyon," the senator pointed out.