MANILA – A lawmaker on Wednesday blamed the government for its supposed inaction on quickening inflation, and warned that workers’ call for wage hikes may pose problems on efforts to stabilize prices.
Albay Congressman Joey Salceda said inflation reached 6.4 percent in August because the government “did little or nothing” to tame rising prices.
“We can no longer blame market opportunists, profiteers and rice hoarders,” Salceda said.
Salceda, who was an economic adviser during the term of former President and now House Speaker Gloria Macapagal-Arroyo, said only the Bangko Sentral ng Pilipinas responded to faster inflation by raising interest rates to tighten money supply.
Inflation hit 6.4 percent in August, smashing the 5.9 percent predicted by the Department of Finance and polls from Bloomberg and Reuters. Bangko Sentral ng Pilipinas Governor Nestor Espenilla said it was his “expectation” that it would not breach 6 percent.
Inflation stayed at its fastest in nearly 10 years and moved closer to 6.6 percent last recorded in March 2009.
Inflation is expected to taper off starting this month, Salceda said, but warned that calls for wage hikes may complicate the situation.
“The main risk to this outlook which is already unfolding is that it would transform into a more permanent inflation given the rising demand for wage adjustments,” Salceda said.
He said that this would pose a problem for policymakers.
“Thus, we would were quite loud in slaying the inflation monster with draconian measures so they would not show up as widespread demand for higher wages,” Salceda said.
To quickly stabilize prices, Salceda proposes importing more rice and distributing this to needy areas, reducing tariffs on meat products and telling manufacturers to observe standard retail prices.
He also said the BSP may need to raise its policy rate again.
Arroyo meanwhile said she plans to sit down with Salceda again to see if their earlier suggestions to economic managers can be stressed anew.
“Remember there were suggestions that came from Congress, I would like to reiterate those,” Arroyo said.
Arroyo also insisted that the Tax Reform for Acceleration and Inclusion (TRAIN) law had a very small effect on inflation. (ABS-CBN News)
