Weak peso affects price of consumer goods

CEBU, Philippines — The peso-dollar rate has already affected prices of consumers goods. At least two sardine brands have increased prices effective this month, according to the Department of Trade and Industry.

Zaide Bation, consumer welfare head at DTI in Cebu, said that Young's Town and 555 are the two sardine brands that increased by as much as P1.

She said that 150-g Young's Town sardine's price increased to P15 per can from the previous P14.10 while its easy-to-open can rose to P15.P15.50 from P14.50.

On the other hand, a 150-g 555 sardine's price also increased by P1 to P15.

Its chili flavored sardine now sells P15.25 per can from P14.25.

Bation noted that the price adjustments were mainly due to the increase in prices of major components in sardine production such as "tamban" fish and cans.

The DTI earlier confirmed prices of some grocery items such as canned sardines and canned meat have increased due mainly to the weakening peso against the dollar.

It said several basic and non-basic commodities including canned goods, milk products and some bath and laundry soaps have increased in prices recently.

If the peso further weakens, price increases in goods with imported components may be expected through the holiday season.

The Philippine peso started to depreciate versus the US dollar last year when the US Federal Open Market Committee (FOMC) started to raise interest rates.

Cebu Bankers Club President Fritz Palileo earlier explained: "The exchange rate for currencies are affected by supply and demand. When the FOMC raised interest rates, investors saw that the US economy is starting to pick up. These foreign investors started to pull out their funds in the Asian countries like the Philippines and transferred it to the US. This move created a demand for the US currency which made the US dollar appreciate."

Despite its cons, Palileo said that among the implications of the peso's depreciation of the peso are the increased funds of families of overseas Filipino workers (OFWs) earning dollars abroad, increased BPO revenues, and higher export revenues. (FREEMAN)