MANILA -- Trade and industry Secretary Ramon Lopez said Agriculture Secretary Manny Piñol is open to the idea of putting suggested retail prices (SRP) on agricultural products as a mechanism to monitor profiteering by retailers.
This is in line with President Rodrigo Duterte’s directive to maintain stable prices of basic necessities and prime commodities (BNPC).
“Since DTI covers groceries and supermarkets and not the public market, we suggested to Sec. Piñol to consider imposing SRP on agricultural products,” Lopez said in a Palace press briefing.
Lopez said that while Piñol agrees with the idea, the proposal will still be “subject to further consultations with the stakeholders.”
He said initial plan is to make Metro Manila as pilot area on the imposition of SRP on agricultural products such as chicken, fish, meat and selected vegetables.
“When there is an SRP, retailers will be more or less be guided and we can prevent profiteering in the public market,” Lopez said.
The increase in the prices of agricultural products, according to Lopez, should not be attributed to Tax Reform for Acceleration and Inclusion (TRAIN) law but instead to the law of supply and demand.
“That’s the reason of the unstable price of agricultural products. In fact, not only the supply and demand nationwide, but supply and demand in the wet market,” he said.
Lopez said the DTI has been closely coordinating with different stakeholders to maintain reasonable prices of the essential products.
“Our concerns are on the essential products. We don’t care about the non-essentials like cigarettes and sweetened drinks and beverages. In fact, we impose additional excise tax on these non-essentials,” he explained.
He said price monitoring activities have been intensified, covering 400 to 600 stores weekly in the National Capital Region and over 500 stories outside the region.
“You know, the concern of our President is to make sure that prices would be stable so that our countrymen will not suffer and so that’s why DTI has been really intensifying the efforts in ensuring that prices are within the SRP,” he said.
Lopez maintained the TRAIN law has minimal effect on the prices of basic commodities.
He said the effect of the higher excise tax rates on petroleum products to the total production cost should only be 0.5 percent.
“We realized that the prices of oil have increased not because of TRAIN. This is other factor. The world oil price/crude oil price went up from about USD50 to USD72 per barrel,” he said.
Based on DTI monitoring, Lopez said prices of canned sardines, condensed milk, the Bear Brand, loaf bread, and instant noodles particularly Lucky Me and Payless have not actually increased despite implementation of TRAIN law.
He said competition has also been keeping the prices of basic goods stable.
“Competition is the one that’s driving the prices down. Because if you will notice in many categories especially what we called FMCG (fast moving consumer goods) there are so many brands, they are competing with each other,” Lopez said.
He added that once a consumer, who does not have a brand preference, find a brand which has a lower price, chances are they would switch brand, this in turn forced brand owners to absorb the increase of distribution cost.
“As a brand owner, I don’t want my consumers to try other brand because they might like it and would not buy my products anymore. That’s what the brand managers don’t want to happen. So they will be the last one to propose a price increase. That’s why they will continue to absorb,” Lopez said.
Meanwhile, Lopez said DTI is planning to launch DTI Suking Tindahan, a project which aims to expand the coverage of SRP.
Under the project, Lopez said sari-sari (small) stores can voluntarily register as part of the mini grocery stores that impose SRP.
“We will accredit them so that they can carry the DTI’s SRP on basic necessities. The marketing strategy is that they will be known for selling cheaper basic products,” Lopez explained. (PNA)
