ASEANews HEADLINE: MANILA-Trump to blame for inflation – Duterte

PRESIDENT Rodrigo Duterte blamed the tariffs imposed by United States President Donald Trump on certain products for record-high inflation in the Philippines, in a rare jab at the American leader whom he had described as his “idol.”

Duterte made the statement as he faces the backlash for spiraling domestic inflation, which has been hitting the poor the hardest.

Inflation rose to a fresh nine-year high of 6.4 percent in August, increasing the odds of another interest-rate hike to discourage lending and cool down consumer demand.

In his speech during a meeting with Filipinos in Jordan, Duterte said he would not be apologizing for the high inflation as he claimed that the US had something to do with the rising commodity prices.

 

“Inflation is dahil ‘yan kay Trump (Inflation is because of Trump). When Trump raised ‘yung mga tariff niya pati (the tarriffs and) banned other items, nagkaloko-loko (it messed things up),” Duterte said.

The President, however, did not make an excuse and said the government was trying to do something about the inflation.

“I am not apologizing, there is really inflation in the Philippines and we’re trying to control it,” he said.

‘Bright’ econ managers

Duterte said he was leaving it to his economic managers to address the impact of inflation, admitting to not being an expert in economics.

“I’m no better than the rest of the… mas bright ‘yan sila (They’re brighter than I am),” the President said.

Analysts disagreed with Duterte that US trade policy has affected the prices of goods in the Philippines.

Antonio “Butch” Valdes, who heads the Save the Nation Movement, blamed the government’s Tax Reform for Acceleration and Inclusion (Train) Law as a factor that caused the spike in inflation in the country.

“I think the President is being misled by his economic advisers on the reason for inflationary price increases. We had warned before that the Train law, which increases indirect taxes, will impact negatively to the consumer. It’s tantamount to increasing the VAT (value-added tax),” Valdes told The Manila Times in an interview.

“The additional tariff imposed by US on our exports to them, increases prices for the US consumer and not for Filipino consumers,” he added.

Instead of blaming others for the country’s economic woes, Valdes said Duterte should consider declaring a state of emergency to address the rising inflation.

“In light of present inflationary pressures caused by the Train law, I strongly suggest that the President consider declaring State of Emergency on the power sector, address the scandalously high cost of electricity causing the most debilitating burden on the Filipino population, and review the disastrous effects of privatizing public utilities, which now threatens national security,” he said.

Economic managers have attributed the record-high inflation in August to higher electricity, gas, fuels, fish, rice, personal transport, vegetables and meat prices.

Steel and iron only

Carlos Manapat, head of the economics department of the University of Santo Tomas (UST) in Manila, said the impact of Trump’s imposition of tariffs was limited to steel and iron.

The Trump administration has shocked global markets due to economic policy shifts, including the ramping up of tariffs on Chinese goods, as well as changes to the North American Free Trade Act with Mexico and Canada.

Palace spokesman Harry Roque Jr. earlier said Filipinos had nothing to worry about the high inflation rate as it was still deemed “normal.”

In a news conference in Jordan, Roque said the government was pulling all the stops to rein in runaway inflation.
Compared with previous figures, the August inflation figure was “high but not ridiculously high.”

Roque then slammed the opposition for supposedly taking advantage of the rising commodity prices to criticize the Duterte administration.

“Take it easy, it’s still normal. Inflation is higher than usual but it’s nothing to worry about,” the Palace official said.

“Inflation is under control. It’s becoming a political issue because election is just around the corner and the public should not forget that. There are people who will take advantage of the issue on inflation,” he added.

August inflation was the highest recorded since March 2009, when price hikes averaged 6.6 percent under the administration of now House Speaker Gloria Macapagal-Arroyo.

 

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