No talks for price freeze for now, says Trade dep’t
THE DEPARTMENT of Trade and Industry (DTI) said it has no immediate plans to impose a price freeze on basic goods, as manufacturers continue to absorb higher production and logistics costs driven by the war in the Middle East.
The decision signals that retail prices of basic necessities are expected to remain stable in the near term despite elevated fuel costs.
“For now, there are no talks [for a price freeze],” Trade Secretary Ma. Cristina A. Roque told Money Talks with Cathy Yang on One News on Thursday. “Everybody’s cooperating. The manufacturers and retailers totally understand the situation.”
She said there is no need at this stage to invoke the Price Act, which allows government intervention in basic goods pricing during emergencies.
“There’s no need for that because in all our talks, there seems to be no problem. Everything goes very smoothly, so for now, there’s no need for that,” Ms. Roque said.
Under the law, prices of basic necessities are automatically frozen at prevailing levels for up to 60 days when a state of calamity or emergency is declared, unless the President decides otherwise. It also lets the President impose a price ceiling upon recommendation of the Price Coordinating Council.
Ms. Roque said the government does not expect price increases in basic goods until May 10, based on agreements with manufacturers and retailers. She added there have been no discussions on imposing price controls even after May 10.
Diesel prices have increased to P100.05 per liter since late February, while gasoline and kerosene have risen to P52.30 per liter and P82.40 per liter, respectively.
“We’re very much concerned with the prices of food, so we have to make sure that we monitor this very strictly,” Ms. Roque said. “We will also enforce [price stabilization measures] when the need arises.”
The DTI continues to meet manufacturers and retailers weekly to ensure compliance with suggested retail prices for basic necessities and prime commodities. Only a portion of product lines are covered by regulation even among large manufacturers with diversified portfolios.
The agency monitors more than 726 variants of essential goods, 196 of which are subject to suggested retail prices. These include canned sardines, processed meats, milk products, soy sauce, fish sauce, vinegar, instant noodles, bread, detergent, bottled water and other staples.
John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said companies’ temporary cost absorption might not last if oil prices remain elevated.
“If elevated oil prices persist, price adjustments could follow shortly, especially for goods with high logistics and energy costs,” he said in a Viber message.
He said sustained increases in transport and input costs would eventually pressure margins and trigger repricing.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said future inventories might already reflect higher input costs.
“New stocks could already reflect higher prices of inputs and passed-through effects due to higher fuel, transport and shipping costs,” he said in a Viber message.
The DTI is also encouraging long-term adjustment through electric vehicle (EV) adoption as transport operators face higher fuel costs.
“It’s good for them (drivers) to at least explore the possibility of shifting now from the regular vehicles to the EV,” Ms. Roque said.
The agency, through Small Business Corp., recently launched a P2-billion E-Transport Loan program to support electric vehicle adoption, offering loans of up to five years with a six- to 12-month grace period.
EVs accounted for 11% of total vehicle sales in the Philippines as of end-March, according to industry data. — Beatriz Marie D. Cruz
