Makers of bread, instant noodles, milk, sardines, and even non-essentials like candles are bound to raise their prices in the first quarter of 2023, based on a gentle reminder issued by the Trade Department Tuesday.
Power retailer Manila Electric Co. also said Tuesday its rates might go in December with the completion of its P0.47 per kilowatt-hour refund.
Meralco spokesman Joe Zaldarriaga said, however, the lower spot market prices might pull down generation charges this month thus softening the impact of the refund.
The firm said earlier that its customers may see an increase in their electricity bills in January 2023 due to the thinning supply in the country’s power grids.
Trade Undersecretary for consumer protection Ruth Castelo said the DTI was preparing consumers to brace for a new set of price increases on basic necessities and prime commodities (BNPCs) as the Department was poised to issue a new Suggested Retail Price (SRP) bulletin next year.
“We’re being candid on the new SRP. We know that consumers are still reeling from Christmas expenses that’s why we are timing the release on the new bulletin accordingly,” she said.
Of the 218 stock keeping units (SKUs) covered by SRP, only 30 percent or about 70 to 80 SKUs are allowed to adjust prices, to render some semblance of affordability among consumers.
The DTI suggests looking for bundled products when buying goods, especially for the Noche Buena feast.
Spending P1,000 for Noche Buena may afford a good enough meal for a family of five, Castelo said.
She noted that while there are products that are yet to be given opportunity to raise their retail prices, petitions for price adjustment keep on piling as manufacturers raise concerns on the price spikes of raw materials and logistics expenses.
“They have justifications, and these are all evident in the current state of affairs,” she said.
The increasing inflation rate is also expected to take its toll on BPNCs and services.
“Government is working on lowering the prices of goods. We told manufacturers to raise their prices to the absolute minimum…And if there are instances of overpricing, you can report them to us at DTI-1384,” Castelo said.
For its part, Meralco said the tight power supply was affecting the electricity rates because power distributors tend to buy it at a higher price at the wholesale electricity spot market.
“There’s an upward pressure on the power rates this December mainly due to the completion of the P0.47 per kWh refund of distribution-related charges,” Zaldarriaga said.
The spokesman said there are still three ongoing refunds that are due to be completed by mid-2023.
“For this month, however, we see a downward movement in generation charges as a result of lower spot market prices. This development may mitigate the expected adjustment as a result of the completion of the distribution rate true-up refund,” he said.
Zaldarriaga assured customers that Meralco is continuously exerting all efforts to mitigate any impact of rate increases to their power bills.
Meralco head of utility economics Lawrence Fernandez also said the movement of generation costs during the dry months depend on several factors, such as fuel cost, exchange rate and the supply-demand situation.
He said that for December, the P0.47 per kWh refund rate, itemized as DRTU-3 in bills of residential customers, will no longer appear in the bill beginning December.
“However, we anticipate its impact to be partly mitigated by lower generation costs due to an appreciation of the Peso and lower WESM prices, because of a slightly improved supply-demand situation,” Fernandez said.
The Energy Regulatory Commission is also readying other mitigating measures as Meralco is set to complete its refunds totaling P1.80 per kilowatt-hour for residential consumers by May next year.
The ERC previously ordered Meralco to implement four different refunds to consumers.
The regulator directed the distributor to refund P13.89 billion, equivalent to P0.2761 per kWh, effective March 21 to December 2022.
The ERC also ordered Meralco to refund its customers P4.84 bullion, equivalent to P0.1923 per kWh starting March 2022 until January 2023.
The third refund involves P7.8 billion, equivalent to P0.4669 per kWh starting May 2022 to November 2022.
The ERC also ordered Meralco to refund its consumers P21.8 billion, equivalent to P0.8586 per kWh, effective July 2022 to May 2023.
The National Grid Corporation of the Philippines (NGCP) has raised a yellow alert on the Luzon grid twice this month, which indicates that the grid has thin reserves based on the difference between supply and demand.
NGCP also said four plants were on forced outages earlier while three are running on derated capacities for a total of 2,080 megawatts (MW) unavailable to the grid. Its available capacity reached 11,572MW — slightly higher than the operating requirement of 10,548MW.
The Department of Energy (DOE) said it would investigate the forced outages of the plants and reiterated that the NGCP should contract power reserves to ensure continuous electricity supply.