Bold or ill-advised?

PHILIPPINES - In Brief 22 Jun 2022 by Romeo Bernardo

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President-elect Ferdinand Marcos, Jr., who will take office at the end of the month, made an unexpected announcement in a press conference Monday. He said that the country is facing a severe enough food supply problem that he has decided to take on the portfolio of the Secretary of Agriculture. He attributed the problem to the war in Ukraine that has caused soaring global commodity prices, including inputs to the food supply chain, as well as some food exporters’ response to protect their own supplies. In particular, he cited Thailand and Vietnam, which have been reported to be trying to form a cartel to control rice prices. The Philippines buys rice, the staple food, from both countries. Year-to-date, BSP calculations show that food inflation contributed a full percentage point to the 4.1% average headline inflation rate. Indeed, considering the external turmoil, local agricultural experts have been warning of a looming food crisis, both in terms of higher prices and lower production. By and large, they welcome the president-elect’s decision, noting that it (a) sends a strong signal of the priority that his administration is putting on the sector and (b) at the practical level, makes a bigger budget allocation possible.[1] They also agree with the president-elect’s assessment that the agriculture bureaucracy needs to be overhauled to make it more responsive and efficient. From talking to knowledgeable insiders, we gather that there are two ways of regarding this high-risk decision. On the one hand, it can be seen as a bold move. Given the president-elect’s majority electoral win, this seems to be a timely way of using his abundant political capital for what will likel...