MANILA – The domestic inflation rate this year is seen to decelerate by 0.3 percentage points with the help of Executive Order (EO) 128, which modifies for a certain period the tariff on pork imports within the minimum access volume (MAV).
Monetary authorities forecast inflation this year to average at 4.2 percent, higher than the government’s 2-4 percent target band.
“If importation is done in a timely manner it (EO) can help reduce the average inflation probably by almost 3 percentage points,” Bangko Sentral ng Pilipinas (BSP) Department of Economic Research (DER) Managing Director Zeno Ronald R. Abenoja said in briefing streamed through the central bank’s Facebook page Thursday.
EO 128 was signed by President Rodrigo R. Duterte last April 7 and it cuts pork import tariff within MAV from 30 percent to 5 percent for the first three months upon the effectivity of the EO and 10 percent in the succeeding three months.
It also slashed the tariff on pork imports that do not qualify for MAV from 40 percent to 15 percent for the first three months and 20 percent for the following nine months.
Abenoja said the BSP supports all measures targeted to address supply constraints on some commodities, which is among the main reasons for the elevated inflation rate since the last quarter of 2020.
He said EO 128, for one, “is a calibrated response” eyed to address supply constraints as a result of the African swine fever.
He said there are also moves to check administrative constraints or non-tariff barriers to trade.
“Again, this will help temper volatility in the domestic prices. So, we support efforts of concerned agencies to conduct stricter market surveillance that are expected to ease pressures on retail prices coming from both tariff and non-tariff measures,” he added. (PNA)