depreciation

HUNGER and nutrition should become non-negotiables under the Marcos administration, according to local economists.

With the majority of Filipinos already not being able to afford healthy diets, the recent spike in inflation caused by more expensive food items would require the national government to introduce interventions.

One intervention, Ateneo Eagle Watch Senior Fellow Leonardo A. Lanzona Jr. told the BusinessMirror, is for the government to provide food subsidies instead of cash subsidies. This will ensure that families do not grow hungry and that the food is also good for them.

“I would like to note that hunger and nutrition are non-negotiables. There seems to be a general trend in this and the previous administration to focus on the economy and basically assume that income will be distributed automatically,” Lanzona said in an e-mail over the weekend.

“It is important to prioritize health, nutrition and education because downgrading their values in this post-pandemic period will make it difficult to return to its previous state,” he added.

Giving food subsidies, Lanzona said, would also spur agriculture production. This can be part of a comprehensive agriculture program where farmers are encouraged to plant nutritious food varieties to increase access to them.

“The idea is that focusing on the economy is really a one-way street.  It is more viable to work on human capital now and determine how we bring it to a level that can restore growth,” Lanzona said.

In a separate e-mail, Ateneo de Manila University Associate Professor Geoffrey M. Ducanes told the BusinessMirror that providing food subsidies for poor Filipinos will prevent them from falling deeper into poverty or make them go hungry.

“This is especially important for children of poor households who might become malnourished and whose physical and mental development can be affected,” Ducanes said.

He explained that the spike in inflation and the depreciation of the peso are worrisome when it comes to food prices.

Ducanes said these could increase the price of imported food that Filipinos consume on a daily basis. This includes “imported fruits and vegetables, meat, canned goods, and even sweets.”

The impact of the depreciation of the peso, Ducanes said, would have lingering effects on inflation. This will have a significant impact on the ability of Filipinos to afford commodities, particularly food.

The increase in inflation hurts the poor more, especially if the source of the increase is in food. The Philippine Statistics Authority (PSA) said food alone has a weight of 34.8 percent in the Consumer Price Index (CPI) for all households and as much as 55 percent for the bottom 30 percent.

“The effect of the peso depreciation is of course not limited to inflation, it could also positively affect our exports as they become less expensive in the world market. In assessing the effects of a peso depreciation, this should also be given weight,” Ducanes said.

“Given the further depreciation of the peso in July 2022, we would expect an even higher cost for the same basket this month should the peso depreciation continue to hold,” he also said. In the long term, Ducanes said, the country should strive to increase domestic agricultural productivity. This can be addressed by dealing with the problems in the agricultural sector.

Ducanes cited a need for greater investment in agricultural infrastructure, equipment, and research and development.

He also stressed that the Philippines should keep trade open in order to allow Filipinos to have access to affordable food and non-food items. This allows a steady supply of items that are not supplied domestically and options to source items elsewhere that may be considered cheaper.

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