THE BATTLE to contain inflation will depend in part on the successful development of domestic resources such as energy, minerals and agriculture, a top lawmaker has said.
“It increasingly looks like this decade will be a decade of high inflation,” Albay Rep. and House Ways and Means Chairman Jose Ma. Clemente S. Salceda said in a statement.
“The only way to balance this is to increase our commodity production, so that our farmers and the domestic commodity sector benefit from the high prices. This is why expanding current production in agriculture and mining, as well as generating new production from oil and gas resources, will be crucial for both the next administration and the next,” he added.
Although the Philippines has not been hit as hard by inflation as some other countries, the damage will be extensive, with inflation over the decade expected to average around 5%, well above the average of 3% for the last 10 years.
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 about $112.8 billion in value added every year, he added.
“Right now, the real agricultural value added is only $35.6 billion, barely 31.5 percent of our viable agricultural potential,” he said. “And beware, my estimate is very conservative, using only 80% of our farmland.”
He proposed harmonizing tax and production sharing agreements on oil, gas and mining. A Natural Resources Trust Fund should also be established to invest the proceeds of resource extraction.
“Extractive industries are non-renewable sources, so global best practice is really to continue to benefit from it by investing revenues from these sectors,” he said, noting that this is done in Norway, whose oil fund is the largest pension fund in the world.
Mr. Salceda advised the apparent next president, Ferdinand R. Marcos, Jr. “not to use all of this revenue as current budget support, but to set some aside when prices inevitably fall in the future.” — Alyssa Nicole O. Tan