Prices of goods and services are only going up toward the end of the year as companies account for more expensive raw materials, higher salaries, and the spike in petroleum products, a survey of local business owners revealed.
Despite this, most of the country’s chief executives are confident about their industries’ prospects for the next 12 months, according to the Philippine CEO Survey 2023 released recently by PwC Philippines and the Management Association of the Philippines (MAP).
The survey by PricewaterhouseCoopers or PwC showed that 83 percent of CEOs are optimistic for the next 12 months despite the threats of inflation, macroeconomic instability, cyber risks, and supply chain constraints, said MAP president Benedicta Du-Baladad.
“Philippine business leaders have faced serious threats, but they have risen to the occasion and found new opportunities for growth through creativity and innovation. The pandemic has forced them to adapt to the changing business landscape, and they have emerged stronger and more resilient than ever before,” she said.
However, among the 157 CEOs who participated in the survey, 42 percent said they planned to raise prices in the next few months.
An economist also said Philippine inflation is expected to rise to 5.7% in September due to storm damage and oil price hikes.
“In view of the storm damage and the oil price hikes, it’s still possible to see inflation pick up to around 5.7 [percent] this month,” said RCBC Chief Economist Mike Ricafort in an ABS-CBN news interview.
“It’s possible, by the 4th quarter, well because of the still high base effects, so there’s still a chance for it to again resume its easing mode at 4 percent levels. And by December, it would be a little over 4 percent, around 4.1,” he said.
Spending normally rises in the Philippines toward the yearend as people receive their Christmas and year-end bonuses.
The inflationary threats mean prices of “noche buena” goods such as Christmas hams would also rise, Roderick Danao, chairman of PwC Philippines, said in a television interview.
“That’s a big probability. If a product is in demand or will peak, and there’s an imbalance of supply, a price adjustment will happen,” Danao said.
Filipinos must also cope with costlier basic goods such as “sili” or local chilies, which now cost from P500 to P720 per kilo in local markets after recent storms flattened farms and ruined crops.
The Bureau of Plant Industry said over 100 hectares of chili plantations were ruined by storms in the last few months, reaching P7.8 million in damages.
All chilies are locally produced, mostly on farms in Luzon. The Philippines does not import the spice, leading to the spike in prices in local markets, the bureau said.
The government is looking at supplementing the “sili” supply from regions that were not hit by the storms to bring the prices down, said BPI spokesperson Henrick Exconde.