MANILA, June 9, 2008 (STAR) By Paolo Romero - Upon orders of President Arroyo, Cabinet officials will disperse to the provinces this week to personally check on the local food situation and immediately and directly intervene to address shortages or price surges.

Executive Secretary Eduardo Ermita said the President will formally issue the directive during tomorrow’s Cabinet meeting at the Palace that would tackle the alarming rise in prices of food and fuel.

“There is a need to closely check the situation on the ground and the President is not content only with the numbers but also actual accounts and descriptions for us to have a clearer picture on the food situation and we can act decisively,” Ermita said in a telephone interview while en route to Manila from Dipolog City yesterday.

He said details and specific actions are as important as broad policies addressing a critical issue such as food in the country. He pointed out that hunger incidents in impoverished areas were reduced not just through policy issuances but also through direct “on-the-ground” interventions in affected communities.

Ermita, who is also Cabinet officer for Regional Development (CORD) for Region 9, already started to comply with Mrs. Arroyo’s order and visited various parts of Zamboanga del Norte over the weekend.

“What we will find out is whether there is a supply problem and why, and deal with it decisively and within the law,” he said.

He said in Zamboanga del Norte, prices of rice are beginning to stabilize with commercial rice ranging from P38 to P43.

He said he has already requested the National Food Authority (NFA) to increase its allocation for government subsidized rice from the present 1,200 bags per week to cope with the increased demand for cheaper rice.

Incoming Press Secretary Jesus Dureza said the rice situation in the Davao region has also started to stabilize. Rice prices in Davao province reached as high as P50 per kilo last week. NFA officials attributed it to farmers and millers withholding selling palay in anticipation of higher buying prices.

“What we need is to strengthen monitoring and communication efforts to avoid speculation,” he said.

He said the Davao City government created the local price coordinating council while the Department of Agriculture set up interagency units to monitor and send timely information on the rice situation.

Press Secretary Ignacio Bunye said the high inflation is not unique to the Philippines as high food and fuel prices are hitting other countries.

“The conventional response to fighting inflation has been to increase interest rates and to tighten monetary policy,” he said.

He said the Bangko Sentral ng Pilipinas, headed by Amando Tetangco, has come up with a calibrated response: increasing the BSP’s borrowing rate by 25 basis points.

“In the context of inflation, interest rates are a tool to control money supply. By increasing interest rates, the BSP hopes to limit the ability of banks to lend money to their customers. Because of higher interest rates, prospective borrowers might postpone borrowing. The money that could have been lent out will be retained by the bank and will not flow to the market,” he said.

Chief News Editor: Sol Jose Vanzi

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