No hike in prices of basic goods this month —DTI
MANILA, Philippines — Despite the lifting of the price freeze last May 15, an increase in the prices of basic goods and commodities is unlikely until June, the Department of Trade and Industry (DTI) said on Tuesday.
“We have requests for price increases from different manufacturers but we are not acting on them up yet to give reprieve to consumers. Maybe we’ll attend to them (petitions for price increases) early June,” Trade Undersecretary Ruth Castelo said in a phone interview.
Castelo said petitions to hike prices of condiments, canned meat, milk, fish sauce, vinegar and coffee are pending before the trade department, some of which since October last year. Manufacturers are asking between 2 and 11% price increase.
The price freeze on commodities that was enforced at the start of Metro Manila lockdown last March 15 expired after 60 days of being effect, following Republic Act No. 7581 that limited price controls to remain enforced for two months.
While the Philippines is still under a state of national calamity, Castelo explained DTI cannot extend the price freeze beyond the prescribed period. As a result, retailers have been instructed to observe suggested retail prices (SRP) of goods that were last updated in September last year.
“All our monitoring teams are on the ground. We have price monitoring two or three times a week in the provinces and everyday in Metro Manila,” she said.
“We also want to take care of our consumers. This is really for our consumers because it would also be difficult for them, especially at this time,” she added.
Metro Manila and 9 other areas including Cebu City have remained under an enhanced community quarantine, or a modified version of its that eases some restrictions on business, until May 31. The rest of the country is under a looser general community quarantine as the government starts to ease movement prohibitions meant to put the coronavirus pandemic under control.
While the SRP is being stringently implemented, Castelo said another “remedy” for DTI is to ask the president to impose a mandated price ceiling on basic necessities, which in effect would put specific price limits on select goods.
The problem with this option however is that it would necessitate DTI to “reevaluate” prices anew, considering costs of production, labor and distribution, which in effect can inadvertently increase prices, instead of keeping them steady.
“Our existing SRP was from last September 2019. The problem if we recommend a price ceiling, there will be a cost-benefit analysis of current prices and in doing so, we may end up with higher prices because we have to consider a lot of things,” Castelo explained.
Prices of basic goods and commodities have remained largely stable so far this year. Inflation, as measured by the consumer price index, averaged 2.6% as of April, well within the central bank’s 2-4% target this year.
Asked how the expiration of price freeze will impact inflation, central bank Governor Benjamin Diokno said “prices are determined by supply and demand of goods.”
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