BBM committed to meeting the food security challenge—Angeles

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Incoming President Ferdinand “Bongbong” Marcos Jr.’s determination to prioritize and boost agriculture will be implemented through immediate and long-term actions, as governments around the world prepare for a looming food crisis, said incoming press secretary Trixie Cruz-Angeles.

Meanwhile, Albay Representative Joey Sarte Salceda has warned that the country’s economic recovery could be undermined by a “massive disinflationary effort” in the United States to halt rising commodity prices and bring liquidity levels back down. to their pre-pandemic trajectory.

Several overlapping crises have created a ‘perfect storm’ for a global food crisis, according to the World Bank, the World Trade Organization (WTO) and the Organization’s June-September 2022 outlook on hunger hotspots United Nations Food and Agriculture Organization (FAO). United Nations and the World Food Program (WFP).

FAO and WFP have warned of “acute food insecurity”.

“The lingering effects of COVID-19, extreme weather, economic shocks, conflict, rising fuel and energy costs, public debt burdens and supply chain disruptions caused by the war in Ukraine have been identified as factors exacerbating pressure on food security, which has now become a race against time,” Angeles said.

“Violence and organized conflict remain major drivers of acute hunger… In addition, extreme weather events such as tropical storms, floods and drought remain critical factors in some regions,” global experts said. .

“The ripple effects of the war in Ukraine reverberated globally against the backdrop of a gradual and uneven economic recovery from the COVID-19 pandemic, steadily rising food prices and the energy and deteriorating macroeconomic conditions,” they added.

Since the beginning of the war between Ukraine and Russia in February, shipments from Ukrainian Black Sea ports have ceased and those from the Russian Federation have decreased in volume, thus increasing costs considerably, especially for country dependent on food imports.

“Disruptions to Ukrainian agricultural production, logistics and food processing caused by active fighting and shortages of inputs are already affecting the global food supply. In addition, already high fertilizer costs, exacerbated by market uncertainties caused by the war, reached record highs. »

According to Morgan Stanley, Russia and Ukraine export 28% of nitrogen and phosphorus fertilizers.

Wheat exports from the two countries accounted for about 29 percent of international exports.

Citing the outlook and an earlier statement from the Philippine Chamber of Agriculture and Food, Inc. (PCAFI), Angeles said food protectionism as well as the need to control domestic prices amid soaring prices global markets and the expected food crisis could prompt exporting countries to limit or ban food and other exports.

This happened during the food crisis of 2007-2008.

“It will be a challenge for the new Marcos administration, as we are currently dependent on certain food imports, including rice,” Angeles said.

“This will require an immediate response, although President-elect Marcos stresses that long-term solutions must be simultaneously underway,” she added,

During the campaign period, Marcos emphasized the need to propel the Philippines towards food security and, ultimately, food sovereignty – putting control back in the hands of the community and the people, directly linking farmers to consumers and limiting the number of hands in the value chain; grant implementation; restrict importation; adopt modern techniques and encourage research and development to promote innovation.

In April, he explained that efforts to boost the local agricultural sector will not be immune to “in-between factors” that are out of control, such as rising fuel prices on the global market.

Prices at the pump soared again in June due to growing demand in northern hemisphere countries currently experiencing summer and a ban on Russian oil by the European Union.

“Mayroon methodology tayong kung paano gawin, pero madaming factor na wala tayong control, wala tayong influence – hindi natin ma-i-influence world events that directly affect our farmers,” Marcos told a press conference.

Marcos stressed that he remains committed to his aspiration to achieve food security and sovereignty.

” We must be careful. The United States will, at some point, have to undertake more significant disinflation efforts than the 75 basis points of key rate hikes it carried out last week. It looks like the US will have to take action similar to what it did in the early 80s under Fed Chairman Paul Volcker, which brought prices back to more normal levels, but also hit hard the global economy,” Salceda said.

“I think that’s the biggest long-term risk to the Philippine economy. And we need coordinated fiscal and monetary policies, as well as efforts in the financial and real sectors of the economy, to mount a defense. solid,” added Salceda.

“I am particularly concerned about two things: First, inflation rates in the United States in May were the highest since 1981, at the height of Volcker-era inflation-fighting policies. The United States has added $6.3 trillion in liquidity since January 2020. In other words, roughly one-third of all the liquidity circulating in the US economy was created just during the pandemic.

“It’s the fastest growing silver in U.S. history. And it’s causing massive spikes in demand without the corresponding growth in production capacity, raw materials, or technology and industry. Of course, this had to lead to price increases.

“For mature economies like the United States, the foundation of the economy is price stability. Thus, they will be obliged, at some point, to kill this new money, to siphon it from circulation.

Salceda, chairman of the House Committee on Ways and Means, recalled that due to Volcker-era policies in the United States in the 1980s, US economic growth was negative, resulting in the slowest Philippine growth in a decade. , to only 3.4% in 1981, presaging the possible economic difficulties of the mid-1980s.

“It’s going to cause a global storm, because you’ll probably have to kill about 20% of all financial assets in the US economy. This is the biggest definancialization the global economy will experience, in nominal terms, ever,” Salceda warns. “And this type of money killing will certainly affect at least some assets in the country, and also make borrowing more difficult for our private sector, which has about $43 billion in external debt.”

“My point is this is going to be a global storm. Our house is very strong thanks to comprehensive tax reforms and reforms in investment and trade liberalization. The first quarter growth levels prove it. But an economic super typhoon like this will hit us anyway. And that will have implications for growth, investment, borrowing costs for the economy. It doesn’t matter how solid the house is, how clean the living room is, or how good the cooks are. We will still be flooded outside,” Salceda said.

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