Holiday season spells more price increases

CEBU, Philippines —  Consumers must brace for more price hikes as the holiday season starts to kick in.

Just when demand for goods normally rises during the Christmas season, the foreseen price increases are also to be driven by several factors pushing up inflation, said Philippine Retailers Association-Cebu president Robert Go, who owns supermarket chain Prince Retail.

"As 'ber' months come, demand increases and yet inflationary trend of increases continues. The increases are not only due to increased demand but due to all factors of inflation," the retailer told The FREEMAN in a phone interview.

The weak peso has also contributed to price hikes especially in imported goods.

"Our dollar exchange is still going up at P53 towards the P54-level per dollar as projected and this will continue to increase but with a projected tapering off during December when OFWs (overseas Filipino workers) send dollar to their loved ones," Go explained.

Another factor pushing up prices of goods is the increase in labor costs, the businessman added.

"There is nothing that shows lowering of prices but up," he said.

Go also projected a significant in demand in December for Christmas goods.

"Retail prices will continue to go up but not a sudden spike. It will be a gradual increase until December in the last two weeks when this spike will be a temporary demand-driven," the PRA official explained.

Consumers have been reeling over rising commodity prices.

Worries have continued to escalate after inflation in August soared to 6.4 percent, the fastest in almost 10 years, as prices of basic goods and fuel continued to rise.

While consumers are clamoring, retailers too are feeling the pinch, Philippine Franchise Association president Richard Sanz said in an earlier interview.

He said retailers are adjusting to the rising costs of raw materials.

"The retail sector, which includes F&B (food and beverage), restaurants and retail services are starting to feel the effects of the higher inflation," he had noted.

"We have started to see some establishments increase the selling prices of their products due to the increasing prices of raw materials like rice and sugar to compensate for shrinking profit margins," said Sanz, who is CEO of FoodAsia Group.

Some establishments, he pointed out, are just "absorbing the higher prices of raw materials because increasing their selling prices might decrease their sales volume further." (FREEMAN)