President Ferdinand "Bongbong" Marcos Jr. is banking on the central bank's inflation targeting and higher production of rice and corn to tame price increases that have exceeded expectations and put a strain on consumer budgets.
Inflation quickened to 6.1% in June, faster than market expectations and highlighting a key challenge for the 64-year-old leader as he called for his first cabinet meeting since assuming office last June 30.
"We are having to be careful because essentially our monetary policy right now is to use interest rates to control the inflation rate," Marcos Jr. said in his first press briefing since his inauguration.
The BSP fired its second consecutive 25-basis point increase in the benchmark interest rate before Marcos Jr. assumed the presidency. Central banks usually raise the policy rates to combat inflation to slow consumer spending and encourage saving.
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Marcos Jr. said he ordered an increase in the production of staples rice and corn to lessen import dependency and ensure the country's food security ahead of the looming food crisis by the last quarter of the year.
"We are going to try, I think we will do it in the Department of Agriculture to boost the porduction of rice and corn in the last two quarters, hanggang Pasko," he said.
Importation of pork and chicken will continue since production remains insufficient, he added, noting that he vowed to make agriculture the "highest priority" to ensure food supply.
The Department of Agriculture earlier warned of a "looming food crisis" that could be felt by the end of the year due to the COVID-19 pandemic and the fallout of the Russia-Ukraine war.
Fuel subsidy for tricycle drivers
Fuel subsidies will also continue and could soon be extended to tricycle drivers too as the government looks to ease the burden of soaring pump prices, Marcos Jr said.
While the government still has "enough" budget to provide aid to public utility vehicle drivers until the end of this year and "a little bit beyond," Marcos Jr. said his administration is looking for sources of funds to sustain the program.
"We just discussed that we are going to try not only to continue the fuel subsidy for the transport sector but expand it to include the tricycles which up to now have not been included," Marcos Jr. said.
The continuation of the program was among the topics discussed during the first Cabinet meeting of the Marcos Jr. administration.
Marcos Jr. also reiterated that free LRT-2 rides for students will continue until the end of the year.
Last week, the Department of Transportation said commuters could ride the EDSA Carousel for free until December 2022.
The free rides program was initially implemented under the term of former President Rodrigo Duterte to help commuters cope with the rising prices of fuel and commodities.
Since the start of 2022, pump prices have been on an increasing trend which the Department of Energy attributed to the impact of Russia's invasion of Ukraine, and increasing global demand after two years of strict lockdowns.
The soaring prices of fuel have prompted the increase of the minimum fare in jeepneys to P11.