DTI will not interfere in SRP approval process

MANILA, Philippines -  The Department of Trade and Industry (DTI) wants to keep its hands off in the approval and adjustments of suggested retail price (SRP) for basic necessities and prime commodities to reduce bureaucracy, its top official said.

 The SRPs of basic necessities and prime commodities are currently set by manufacturers but are subject to evaluation as to their reasonableness by the DTI. Any intent to adjust SRPs also requires approval from the agency.

Trade and Industry Secretary Ramon Lopez is now proposing to deregulate the country’s SRP scheme.

“We should not have this SRP approval from the DTI anymore. Let the market decide. Setting of the SRP should be a company decision and we should let the company decide on the adjustments on the SRP,” Lopez said.

The trade chief, however, noted that the agency’s plan to remove itself from the SRP approval process should not alarm consumers as to the possibility of price abuse or collusion among manufacturers.

“What we will monitor is if their SRPs are reasonable, but it’s not an approval,” he said.

“We will still have to continuously review industries that are probably participated in by few players because those are where unfair pricing or collusion could arise. But as long as there’s a lot of players, a lot of brands, and the supply chain situation is good, the prices will be assured to be competitive,” Lopez added.

According to Lopez, companies selling basic necessities and prime commodities are hesitant to increase prices for fear of losing market share to another brand.

As such, he said most of them – particularly those producing fast-moving consumer goods – are actually selling at a much cheaper price just to get the loyalty of consumers.

“We will still intervene and call their attention if for example we observe that in an industry, they increase their prices at the same time and there is no competition for a lower price,” Lopez said.

The SRP is used as a tool to ensure there is no excessive profiteering among companies and no  sale of any basic necessity or prime commodity at a price grossly in excess of its true worth as prohibited under the Price Act.