COUNTRY'S MACROECONOMIC FUNDAMENTALS CAN WITHSTAND 'EXTERNAL SHOCK'
MANILA, June 8, 2008 (MALAYA) Palace not worried about soaring prices...
MALACAŅANG is not worried about soaring oil and food prices which brought the inflation rate to a nine-year peak of 9.6 percent in May, saying the country's macroeconomic fundamentals are strong enough to "withstand external shock."
"I believe the situation is manageable," Press Secretary Ignacio Bunye said, noting the situation will not prompt President Arroyo to seek emergency powers.
Bunye said inflation skyrocketed mainly because of external factors such as the rising prices of rice and oil in the world market.
He said the government has been dealing with the "global phenomenon" by adopting various approaches to help the people cope with the rising cost of basic commodities, which includes the P500 one-time grant for some four million consumers using a maximum of 100 kilowatts of electricity a month, the fertilizer subsidy to farmers and the P1 billion, one-time education subsidy to poor college students.
"As I said, this (inflation problem) is imported. It's not unique to us," Bunye said adding the government is employing short-, medium- and long-term measures to address the problem.
Asked how far the government can go in subsidizing the public using proceeds of expanded value added tax, Bunye said, "theoretically, until supplies last."
"Our objective is to provide targeted assistance to the sector vulnerable (to the rising cost of basic commodities)," he said.
President Arroyo has signed Executive Order 728 creating the National Food and Energy Council (NFEC).
The council, chaired by Arroyo with Planning Secretary Augusto Santos as co-chair, is tasked primarily to ensure adequate food and energy supply. It is composed of the secretaries of agriculture, environment, energy, anti-poverty and national security councils and the heads of the National Power Corp., Philippine National Oil Co. and the NFA.
Bunye said while the council could recommend that the President seek emergency powers, it will still be Congress' call.
Senate President Manuel Villar said Arroyo has enough powers to contain the problem.
He said Congress is always to ready to legislate if existing laws prove inadequate.
He said emergency powers could be abused.
"Pag-usap-usapan na lamang kung ano ang kailangan at hindi na kailangan ang emergency powers na hindi maganda sa isang demokrasya," he said.
La Union Rep. Thomas Dumpit Jr on Monday filed House Resolution 512 urging Congress to grant Arroyo emergency powers to address the rice crisis.
Speaker Prospero Nograles said President Arroyo does not need emergency powers because she already "has enough executive powers to cope with the situation."
He warned: "To the rabble-rousers: Do not sow public intrigues or try to cause our people to think negatively. Our government is in full control and we have good economic fundamentals which are in place. We will weather the economic storm."
The May inflation was the highest since January 1999 when it was at 10.5 percent. April inflation was 8.3 percent.
Core inflation, which excludes volatile items such as food and energy, also went up in May, to 6.2 percent from 5.9 percent a month earlier, bringing the five-month average to 4.9 percent.
Prices of food, beverage and tobacco, which make up half of the basket of consumer items used to measure inflation, posted a double-digit increase for the second month, rising to 13.7 percent from 11.4 percent in April. - Wendell Vigilia and Dennis Gadil
Chief News Editor: Sol Jose Vanzi
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