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Cushions to inflation surge needed

Albay Representative Joey Salceda on Monday said he anticipates that surging inflation is likely to persist until yearend, and that the administration's economic managers should implement aggressive measures to cushion its effects.

Salceda, an economic analyst, said July inflation is likely to have spiked to 5.6 percent and by August inflation would peak at 5.9 percent. This will hover at around 5.6 percent till the end of the year, he added.

The lawmaker, however, said that with the right remedial measures, inflation can fall below 5 percent this September and end the year at 4.4 percent.

Salceda in an interview said he was appointed by House Speaker Gloria Macapagal-Arroyo as her Special Focal Person for Counter-Inflation Measures.

He said he has consulted the administration’s economic managers and discussed the five economic measures that would bring down inflation to a comfortable level.

The economic measures that need to be implemented include: reduction of tariffs on the importation of fish, meat, feed wheat, vegetable, and rice.

Rice which is the most basic item, Salceda said the government plans to import 500,000 to 800,000 metric tons of well-milled rice with staggered deliveries over 5 to 6 months period.

He said the tariff reduction on imported rice is the structural solution, and the Lower House has terminated debates on the bill which is likely to be approved in the coming weeks.

Another measure at hand is to ask government regulatory agencies to defer any upward price or rate adjustments which add to cost pressures until inflation goes back comfortably to the 2-4 percent target band.

As for the central monetary authorities, the Bangko Sentral ng Pilipinas (BSP and its Monetary Board would be asked to make a robust adjustment in its key policy rates to moderate inflationary expectations and opportunistic impulses in the market.