Just when we thought we had conquered inflation in the Philippines, this problem is resurfacing in other countries worldwide. We are already feeling the impact of higher prices on essential goods like rice and petroleum, which are crucial for Filipinos and local industries. However, the rise in inflation did not happen overnight. The cost of rice has been gradually increasing for several months, while gasoline and diesel prices have been steadily rising for the past 10 weeks. It’s evident that our policymakers couldn’t claim to be caught off guard by this issue since the price hikes have been occurring gradually over time, slowly squeezing the finances of our less fortunate citizens. What caught Filipinos off guard, however, is the government’s response to this crisis, which is contrary to the rational actions typically taken in such situations. Finance Secretary Benjamin Diokno, the head of President Marcos’ economic team, even admitted that he and his Cabinet colleagues were shocked by the price controls imposed by the Chief Executive last month. The shocking part of this situation is that President Marcos himself established a high-powered committee consisting of department heads just last May to craft a coordinated policy response to the growing inflation crisis. Under Executive Order No. 28 issued in May this year, the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) was created as an advisory body to address inflation, particularly in key commodities like food and energy. Although little has been heard from this committee so far, it takes time to formulate policies that address deep-rooted structural problems. However, impatience should not be an excuse to implement measures that go against the principles of supply and demand, which is a cornerstone of economics. The Marcos administration must now focus on implementing concrete solutions to this crisis. The first step should be to repeal EO 39, which imposed price ceilings on rice, as soon as possible. There are reports of retailers rationing rice sales to comply with the price caps, which will only lead to higher prices. The next step is to convene economic and political leaders within the administration and come up with a single, coherent policy in consultation with key stakeholders from the private and agriculture sectors to mitigate the effects of inflation. Temporarily reducing import tariffs on rice, even down to zero if necessary, would be the best course of action until prices stabilize. This may not be popular with farmers, but it will be a temporary measure for the greater good. In the long term, the government should focus on providing better technical assistance to the agricultural sector to improve rice yields and push for structural reforms in the logistics chain to address supply bottlenecks. Most importantly, the entire official family and Cabinet must work together to formulate unified policies to tackle these challenges. While the Bible may have advised not letting the left hand know what the right hand is doing in the context of helping the poor centuries ago, modern economics requires both the official policy side and the influential unofficial side of the Marcos administration to be aware of each other’s actions and work together to solve key challenges. In the case of our resurfacing inflation problem, the government must unite to solve the problem instead of allowing conflicting measures that undo the work being done. President Marcos has strong political support from the Filipino people, and he must utilize this capital wisely by making difficult decisions that adhere to established economic principles, like the law of supply and demand, rather than pursuing populist policies like price controls that exacerbate the problem. Your subscription could not be saved. Please try again. Your subscription has been successful. Read Next Don’t miss out on the latest news and information. Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000. 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