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By Darwin G. Amojelar Reporter
THE soaring domestic food prices
will increase the number of poor
Filipinos and will spoil the government’s fiscal situation as well
as the domestic economy, the Asian Development Bank (ADB) warned.
In Madrid, the bank’s governing
body met Monday to discuss new strategies to fight poverty and
better serve its members in the Asia Pacific region.
In a new report titled,
“Soaring Food Prices: Response to the Crisis,” the Manila-based
lender said food price inflation may have seriously eroded the
purchasing power of the poor, increasing the severity of food
deprivation and malnutrition.
To determine the impact of high
food prices in the Philippines and Pakistan, the ADB used household
expenditure survey data in three different scenarios: a 10-percent;
20-percent; and 30-percent hike in food prices.
“The results indicate that
poverty will be worsened in terms of the number of absolutely poor
as measured by the national poverty line,” the report said.
In the Philippines, a
middle-income country, the head count of poor Filipinos rises by
2.72 million, 5.65 million, and 8.85 million under the three
scenarios of 10-percent, 20-percent and 30-percent increases in food
prices.
As of 2006, the number of poor
Filipinos totaled 27.6 million, 16 percent more from the 23.8
million recorded in 2003.
In Pakistan, a low-income
country, the head count of poor people rises by 7.05 million, 14.67
million, and 21.96 million, respectively.
For the average Filipino, food
expenses is about 40 percent of total expenditure, while Pakistanis
spend about 50 percent of total expenses on food.
Cost of living to decline
In a separate study titled,
“Food Prices and Inflation in Developing Asia: Is Poverty
Reduction Coming to an End?,” estimates by the ADB suggest that if
food prices go up by 10 percent, the average standard of living of
the people in the Philippines and Pakistan will decline by 4.16
percent and 4.84 percent, respectively.
“But rising food prices affect
people at varying income levels differently. Higher prices put
upward pressure on the cost of living and thus lower the overall
standard of living,” the ADB said.
The report said that during the
one-year period ending March, wheat export prices increased by 130
percent, rice by 98 percent, and maize by 38 percent.
In March alone, rice prices have
doubled. Therefore, the price impacts have been most pronounced in
import dependent countries like the Philippines.
During the past year, the ADB
said domestic rice prices doubled in Bangladesh and Cambodia, and
increased by 70 percent in Afghanistan, 55 percent in Sri Lanka and
40 percent in the Philippines.
It added that the policy
responses, like export bans and price floors, of key rice-exporting
countries including the People’s Republic of China, Pakistan,
Vietnam and India have increased price volatility and uncertainty in
the international rice market.
The bank said the diversion of
cereal use from food to biofuel has tightened wheat, corn, and other
grain supplies. Also, conversion of agriculture lands for urban or
industrial uses has contributed to the soaring food prices.
--With Xinhua
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