A non-profit, non-stock consumer group has asked the Trade Department and the National Competition Commission to reconsider a decision stopping the prior approval of suggested retail prices on basic necessities and prime commodities.
Laban Consumer president Victorio Dimagiba, a former Trade official, on Monday cited the importance of SRPs on such commodities.
“The Trade Department as a regulator should continue to perform this legal duty, notwithstanding that the manufacturers and producers can always claim that their product’s SRP is “reasonable considering among others, the competition (and) profitability, and that they cannot price themselves out in the market without losing market shares,” he said.
“We also want to emphasize that the Trade Department evaluation of SRPs are based on standards and criteria prescribed by the Price Act. It was not arbitrary and guess work,” he added.
Dimagiba noted instances where a mandated price ceiling was allowed. He said criteria are taken into consideration in the determination of “reasonable price ceiling”—supply, cost to producer, manufacturer, distributor or seller, exchange rate, amortization, cost of machinery, change in the cost of labor, transportation, distribution, power and other factors or conditions in aid of the determination of the reasonable price ceiling.
“All these valuable data are now lost to Trade Department when SRP setting becomes an absolute decision of the manufacturers. To rely solely on monitored prices at the retail level is deceiving. As an example, a 500 ml bottled water can generate data of as low as P12 and as high as P70 per bottle,” he said.
The Price Acts considers hoarding, profiteering and cartel illegal as acts of price manipulation.
The pre-approved SRPs provide a critical standard and available data will determine and prove if price manipulation like profiteering or cartel is being committed.
Dimagiba said a proposal to repeal the cartel provision of the Price Act was not successful. The pre-approved SRPs, meanwhile, could have facilitated the work of the Philippine Competition Commission insofar as violations involving the trade and movements of basic necessities and prime commodities are concerned. The PCC can impose fines triple the amount provided by the Competition Act.