The government plans to strengthen the agricultural sector in a bid to hold down inflation arising from the spiraling of prices of oils products.

Deputy presidential spokesman Ricardo Saludo, in an interview with Radio Mindanao Network, explained that while gasoline is a big factor in the upswing of basic commodities and services, food still accounts for 50 percent of inflation.

Saludo explained that Filipinos spend most of their money on food. "That is why the government endeavors to strengthen the agriculture sector so that food prices would remain affordable for ordinary citizens," Saludo added.

With the continual increases in prices of gasoline and other oil products beyond government control due to the Oil Deregulation law, Saludo said that the Macapagal-Arroyo administration has trained its sight on areas where it has control, such as food and animal feeds.

He revealed that over the past three years, the Arroyo administration has invested P80 billion to spur agricultural growth which hit eight percent during the first quarter.

"This is a big help for our people. Since we cannot avoid price hikes for basic commodities and services, including transport fares, as a result of oil price increases, we are hopeful that the cost of food items does not shoot up, too," he said.

Of course, the country has joined other oil-importing countries to intercede with the Organization of Oil-Exporting Countries (OPEC) to increase their production to meet demand, Saludo said.

The OPEC said it would increase production by 2.5 million barrels a day and this has already resulted in oil prices going down significantly in the US mainland.

The expanding world economy, particularly those of China and the United States, and fears about the strife in Iraq and terrorist activities in Saudi Arabia that could further disrupt supply, are the primary reasons ahy oil prices have reached record levels worldwide, Saludo said.

Because of its growth economy, China now imports seven million barrels a day from six million last year. The US economy has recovered and grown by four percent this year and all that result in greater oil consumption and the increase in its price.

In the same interview, Saludo welcomed expansion in world economy, notably China and the United States, saying this would filter down to the Philippines, in terms of more job opportunities and heightened importation.

Saludo pointed out that countries experiencing improved economy buy more from the Philippines. "In fact, our exports have gone up to nine percent since last year," he said.

"We expect it to grow up some more as an offshot of significant improvements in the global economy," he added.

There are setbacks, however, to economic growth. Among them is the need for improved economies to procure more crude oil which, in turn, pushes up the commodity's price in the world market.

Saludo cited as an example China which was compelled to buy an additional one-million barrels of crude everyday to meet increased demand of its domestic market.