‘Pro-Cartel’ Policies Blamed for Rising Prices

The Bagong Alyansang Makabayan (Bayan) and its member-organizations held today a noise barrage picket protest along España Avenue in Manila to denounce the spiraling oil and rice prices and the Arroyo government’s failure to effectively address the crisis.

Holding empty pots and pans to symbolize the problem of high prices, Bayan activists blamed government’s pro-market policy of deregulated prices as one of the main factors behind the worsening crisis.

“Note that oil and rice are two of the most cartelized sectors in the country. Deregulation thus gives the oil and rice cartel more room to manipulate prices and exploit the Filipino people”, Bayan secretary-general Renato Reyes Jr. said.

Bayan said that it expects the crisis to intensify and oil and rice prices to further escalate as the government continues to implement the same flawed policies that helped worsen the crisis.

“The proposed tariff reduction in rice imports, for instance, tends to discourage local palay production and thus promote more imports. In addition, the plan to further privatize the importation of rice in the country will only give more opportunities to private traders to manipulate rice supply and prices”, argued Reyes.

Meanwhile, oil prices continue to escalate because of the continued implementation of the oil deregulation law and imposition of the 12 percent value added tax (VAT) on petroleum products. “This year, the government expects less revenues from privatization, and as such, will intensify its reliance on the VAT revenues, which mostly come from oil. The oil deregulation law, which allows automatic price hikes, serves the government purpose of collecting more revenues from the VAT”, Reyes said.

The group noted that the Philippines, which is heavily dependent on imported oil is vulnerable to global oil price hikes. On the other hand, the increasing importation of rice by the NFA for its intervention in the local rice market undermines the country’s rice supply security especially now that major sources of rice imports like Vietnam are facing their own domestic supply problems.

“The key is to increase state intervention in the local oil and rice sectors to protect the Filipino consumers from uncertainties in the global markets”, said Reyes.

Bayan reiterated its demand to reduce oil and rice prices and impose price control mechanisms as an urgent measure to address the crisis and bring immediate relief to the people. #