The Department of Trade and Industry (DTI) expects another round of price hikes in the third quarter as companies file petitions for increases in the suggested retail price (SRP) of their products.
“This will not happen during my term as I am on my way out. The new leadership will have to deal with this, but I will still support the new administration and if they will reach out, I am willing to help out,” Trade Secretary Ramon Lopez said.
While the entire global supply chain is in dire straits, Lopez encouraged companies to intensify local sourcing and provide alternative inputs, particularly for food manufacturing.
“This is a good opportunity for local producers to step up. They should supply the needs and required inputs for manufacturing and processing and show the world that we have our own supply,” he said in a panel briefing during the launch of the e-Presyo App Thursday.
He pushed for increased local sourcing of fruits, vegetables and pork products, to stave off the threat of a food crisis.
“The supply chain disruption is a global issue, an offshoot of the Russia-Ukraine war. This is a difficulty beyond our control, therefore we should manage what we can control, which is what we have at the local front,” Lopez said.
Adding to the supply chain crisis is the increasing cost of shipping and logistics that doubled at the time of Russia’s invasion of Ukraine.
While Philippine trade with Russia and Ukraine was marginally low at 0.5 percent, the war severely affected global supply due to economic sanctions enforced on Russia’s tradable goods, affecting a number of Philippine imports such as crude, wheat and palm oil.
The Philippines biggest sources of wheat are the US, Australia, Romania, Ukraine and Russia. In 2020, the Philippines imported $1.49 billion in wheat, becoming the 8th largest importer of wheat in the world. In the same year, wheat was the 7th most imported product in the Philippines.
Despite the surge in importation costs of several commodities, the DTI noted a softening in the price of local goods like beef and other meat inputs from the January 2022 pricing, a trend the DTI expects should be sustained throughout the year.
Last month, Agriculture Secretary William Dar said there is still a shortage in the local production of fish, pork, and rice due in part to years ofå neglect of agriculture.
In an interview on GMA-7, Dar said there was still a scarcity in fish and pork, and rice levels were only at 92 percent.
“Local production is not enough,” he said.
Speaking of the low priority given to agriculture, Dar said the Philippines only allocates 1.5 percent of its budget to the sector while other countries dedicate 3.5 percent to 6 percent of their budget.
Dar said the incoming administration of President-elect Ferdinand Marcos Jr. will inherit an agriculture sector that has been “under-budgeted, and neglected all these 30 years.”
“It’s gasping for breath, and we need sizable budgetary support to make it possible to really now unlock the potential of Philippine agriculture,” said Dar, who was appointed DA chief in 2019.
In May, the DTI updated the SRP for basic necessities and prime commodities for 218 stock keeping units (SKU) within the jurisdiction of the DTI.
In a bulletin published on May 11, 2022, the DTI has approved a minimum increase for 82 basic necessities and prime commodities in its latest SRP list while 136 SKUs or 62 percent were unchanged from the Jan. 27, 2022 SRP Bulletin prices.
“The Department carefully evaluates the requests for price adjustments from the manufacturers of BNPCs under the DTI’s jurisdiction. It is imperative that the DTI and the industry collaborate to ensure the consumers of high-quality products at affordable prices,” Lopez said.
Products within minimal price hikes include bread, canned fish, potable water in bottles and containers, processed milk, locally manufactured instant noodles, coffee, salt, laundry soap, detergent, candles, flour, processed and canned pork, processed and canned beef, vinegar, fish sauce (patis), soy sauce, toilet soap, and batteries.
The new set of SRP includes additional SKUs such as Bareta Bar White (360g) and Bareta Bar FabCon (360g).
The DTI maintained that 71 out 82 SKUS have increased their SRPs by 8 percent to 10 percent only, still below the global price movement of raw materials.
The DTI adjusts the SRP list from time to time to guide consumers and retailers in their purchase and sale of basic and prime goods.
The public may also refer to the most recent SRP list of basic and prime goods before going to the supermarkets and grocery stores. The price guide is accessible via the DTI website.