Trade Minister Enggartiasto Lukita, Finance Minister Sri Mulyani Indrawati, Bank Indonesia Governor Agus Martowardojo and Chief Economic Minister Darmin Nasution participate in the launch of the Harga Pangan mobile phone application in Jakarta on Monday (12/06). (Photo courtesy of Bank Indonesia)

Gov't Launches Mobile App to Curb Food Prices, Inflation

BY :TABITA DIELA

JUNE 12, 2017

Jakarta. The government launched a mobile application on Monday (12/06) that lists the prices of staple foods across the archipelago as part of efforts to keep inflation in check.

The Harga Pangan app shows the daily prices of widely consumed foods such as chili peppers, rice, eggs, cooking oil and garlic at 164 traditional markets in 82 cities in Indonesia. It is available for devices with iOS and Android operating systems.

The desktop version, which is accessible at Hargapangan.id, has already been operational since January.

"Successfully controlling inflation requires more than innovation and policy breakthroughs," Bank Indonesia Governor Agus Martowardojo said in a transcript of his speech, which was sent to the Jakarta Globe.

"It needs support from credible, accurate and comprehensive volatile food price data and real-time information on production, supplies, stock until the price when it reaches the consumer," he said.

Agus said price data will be captured between 9.00 a.m. and 11.00 a.m. every workday and that the central bank will validate the results before publishing it at 1.00 p.m. daily.

He said improving data accuracy could help Bank Indonesia achieve its 2.5 percent to 4.5 percent annual inflation target in 2018. The target for this year is 3 percent to 5 percent.

Indonesia's annual inflation rate reached 4.33 percent in May, compared with 3.33 percent in the same period a year ago. The inflation rate was 7.15 percent in 2015 and 7.32 percent in 2014.

Bank Indonesia has set a target for an inflation rate of 2.5 percent to 4.5 percent for next year.

"Measuring inflation accurately has a tremendous impact on managing the state budget," Finance Minister Sri Mulyani Indrawati said on her Instagram account.

"We certainly hope the information from PIHPS [Strategic Food Price Information Center] can provide a faster, more precise early warning on commodity [prices] in a specific area [...] which needs a response from the government," she said.

Hari ini saya memberikan keynote speech pada acara peluncuran aplikasi Pusat Informasi Harga Pangan Strategis Nasional (PIHPS) di Gedung Thamrin Bank Indonesia. Acara ini juga dihadiri oleh Gubernur Bank Indonesia, Menteri Koordinator Bidang Perekonomian dan Menteri Perdagangan, Pada kesempatan ini saya menyampaikan bahwa mengukur inflasi secara tepat dapat berpengaruh luar biasa besar bagi pengelola APBN karena cost of fund sangat dipengaruhi oleh nilai inflasi. Kita tentu berharap dengan informasi dari PIHPS bisa memberikan semacam early warning secara lebih cepat, akurat, mengenai komoditas, di lokasi mana yang mengalami kenaikan atau penurunan yang tentu selalu akan membutuhkan respon dari pemerintah. Aplikasi PIHPS merupakan sistem informasi berbasis web yang digunakan untuk mengurangi kesenjangan informasi harga atara produsen dan konsumen. Selain itu, pengembangan sistem informasi ini juga dapat bermanfaat sebagai acuan pelaku usaha dan produsen dalam menetapkan harga, acuan konsumen dalam membeli, sinyal awal terjadinya gejolak harga komoditas di pasar, dan sebagai bahan kajian untuk memahami perilaku harga komoditas dan melihat keterkatian harga yang terintegrasi antar provinsi di Indonesia. Dengan aplikasi ini, harga yang direkam tidak hanya saat naik tetapi juga saat turun dan juga bobot konsumsi di masyarakat sehingga bisa menggambarkan tingkat harga yang dinikmati oleh masyaralat dengan lebih akurat. Saya tentu menyambut gembira dengan diluncurkannya PHIPS dan kita berharap kerjasama ini akan betul-betul menciptakan perbaikan di dalam kualitas indikator-indikator ekonomi Indonesia sehingga bagi policy maker bisa membuat keputusan yang jauh lebih akurat.

A post shared by Sri Mulyani Indrawati (@smindrawati) on

A special team consisting of representatives from Bank Indonesia, the Ministry of Finance, the Coordinating Ministry for Economic Affairs and the Ministry of Trade and tasked with keeping inflation in check, initiated the app, which was developed by Yogyakarta-based Gamatechno Indonesia. The company is an affiliate of the Gama Multi Group, which is owned by Gadjah Mada University. The company focuses on developing software for universities, the government and transport and logistics companies.

Volatile food prices have in the past frequently pushed Indonesia's headline inflation rate higher than the central bank's target, especially during Ramadan and when supplies are low. The government has blamed food hoarding and speculators for this trend.

Ramadan began in late May this year and food prices have been relatively manageable, Bank Indonesia said. However, the headline inflation rate stood at 4.33 percent in May – the highest in 14 months. May's annual food inflation rate was 3.26 percent.

The central bank plans to expand data coverage next year to include the wholesale prices farmers get when selling their produce. Providing such data to farmers could avoid layers and layers of intermediary sellers that could distort prices, Agus said.

Finance Minister Sri Mulyani said on Monday that the government plans to propose a law to manage food prices. She did not elaborate, but slammed anyone involved in actions that cause food price distortions by saying that it hurts the economy. She added that it is "very evil" and a serious crime.

The Trade Ministry issued a decree last year on reference prices for seven commodities for farmers and consumers to manage price fluctuations. The government also has been pushing its "sea toll" by providing subsidized sea transportation links between islands. This is aimed at reducing price gaps in the region by ensuring steady food shipments.

Additional reporting by Reuters

SHARE