THE BATTLE to contain inflation will depend in part on successfully developing domestic resources like energy, minerals, and agriculture, a senior legislator said.
“It’s increasingly looking like this decade will be a decade of elevated inflation,” Albay Rep. and House Ways and Means Chairman Jose Ma. Clemente S. Salceda said in a statement.
“The only way to balance that out is to increase our output of commodities, so our farmers and the domestic commodities sector benefit from high prices. That’s why expanding current output in agriculture and mining, as well as generating new output from oil and gas resources, will be crucial both for the next administration and the one after that,” he added.
Although the Philippines has not been as badly hurt by inflation compared with some other countries, the damage will be far-reaching with inflation over the decade expected to average about 5%, well above the 3% average over the past 10 years.
Mr. Salceda, citing estimates from Jake Mining Corp., said untapped mineral deposits in the Philippines have been valued at around $1 trillion. Meanwhile, the agricultural potential of the Philippines is around $112.8 billion in value-added every year, he added.
“Right now, actual agricultural value added is just at $35.6 billion or just 31.5% of our viable agricultural potential,” he said. “And mind you, my estimate is very conservative, using just 80% of our agricultural land.”
He proposed harmonizing the tax and production sharing agreements on oil, gas and mining. A Natural Resource Trust Fund should also be set up to invest the proceeds of resource extraction.
“Extractives are non-renewable sources, so the global best practice is really to continue benefiting from them by investing revenue from these sectors,” he said, noting that this is being done in Norway, whose oil fund is the world’s largest pension fund.
Mr. Salceda advised the apparent next President, Ferdinand R. Marcos, Jr. “not to use all of these revenues as current budget support, but to set some aside for when the prices inevitably fall in the future.” — Alyssa Nicole O. Tan