The Economic Development Cluster (EDC) has prepared 14 thematic recommendations to help the country weather the indirect impact of the Russia-Ukraine conflict.
In the Talk to the People of President Rodrigo Roa Duterte on Monday, Finance Secretary Carlos G. Dominguez opened the EDC’s presentation with an overview of the impact of the Russia-Ukraine tensions on the Philippine economy.
According to Dominguez, the impact of the crisis will not be directly felt by the country but may come in the form of indirect shocks through four major channels. These are the commodity market, the financial market, investments, and impact on our fiscal health.
This was followed by Socioeconomic Planning Secretary Karl Kendrick T. Chua’s presentation on the EDC’s 14 thematic recommendations to help mitigate the indirect impact of the ongoing global crisis and keep the country on track to achieving its growth targets for this year.
“We need to shift the entire country to Alert Level 1 at the soonest possible time and to open all the schools for face-to-face learning. This can increase the productivity of our domestic economy and offset the external risks. While we cannot prevent the risks coming from the global perspective, we can strengthen our domestic economy to provide the people with more jobs and opportunities,” Chua reiterated.
Moreover, to help mitigate the increased prices of diesel and gasoline, the EDC recommended doubling the budget for fuel subsidies from PHP 2.5 billion to PHP 5 billion to cushion the impacts on public utility vehicle (PUV) drivers in the transport sector.
At the same time, the cluster also recommended the provision of additional fuel vouchers for agricultural producers by increasing the budget from PHP 500 million to PHP 1.1 billion to reduce input costs. The first tranche will be in March and the second tranche in April.
Chua also listed several crucial measures that will require legislative approval. These include increasing the buffer stock of gas and diesel from 30 to 45 days and liquefied petroleum gas or LPG from 7 to 15 days.
For energy generation and electricity, the EDC proposed expanding the supply of coal and temporarily removing the commodity’s most favored nation (MFN) tariff rate of 7 percent until December 2022. This will ensure sufficient inventory and lower power charges for consumers.
Chua also promoted energy conservation, including the use of sensor technologies for energy savings, and welcomed the agreements with private electric companies to stagger future increases in generation charges.
Chua also presented recommendations to increase supply and ensure lower prices of rice, corn, pork, fish, chicken, sugar, and wheat by generally lowering tariff rates, expanding the sources of imports, and removing all non-tariff barriers for importation. He then repeated the need to pass the livestock and dairy bills to help farmers increase their productivity and competitiveness and ensure the domestic food supply.
He added that the inclusion of agriculture and renewable energy in the draft Strategic Investment Priority Plan will improve our bid in attracting more investments in these sectors which can help increase the supply of food and energy.
When asked by President Rodrigo Roa Duterte whether these recommendations require legislation, Chua stressed that the executive branch of the government will need to move fast in order to implement what is already in the budget and prepare for the resumption of session in Congress in May.
“We have the subsidies in our budget so we will implement these immediately. We will also submit a request for the issuance of an Executive Order for tariff reduction as Congress is not in session at this time. Finally, for the two that need legislation, we will draft these for Congress’ consideration when they return,” Chua said. (NEDA)
