"Our flour industry looks good now since renewed confidence in the economy has stabilized the peso a little, making the cost of wheat bearable," said Ricardo Pinca, executive director of Philippine Association of Flour Millers (Pafmil).
"Of course, prices of flour can hinge upon external as well as internal factors and lately it is the internal factors that have driven prices up," Pinca added, referring to the fluctuations in the peso-dollar exchange rate.
Before the ouster of former President Estrada, Pinca had expressed deep concern about the prospects of the local flour milling industry, with the peso then plunging to as low as P55 to a dollar.
Pinca said the industry had to shell out more pesos to purchase its raw materials abroad as a result of the peso devaluation and of world prices "about to go through the roof."
"Prices of four overseas are factors to contend with since they are too high for local flour millers," said Pinca, who is also an official of General Milling Corp. "But with the peso stabilizing, we can at least have only the external factors to worry about."
Pinca said the ascension of Mrs. Arroyo to power has averted the adoption of what flour millers once considered the only option to survive: To increase prices.
But any price increase is considered a risky move for the industry considering that consumers may turn to other products instead or may stop buying altogether.
"The end-products of flour such as bread, cakes, and noodles are not basic necessities in our Filipino culture," said Pinca. "These lies the problem since had the economy remained the way it was during the past administration, the industry would have suffered."
As the Filipino household tightens its noose on expenses, products which are not considered basic "in our way of life" are the first casualties, Pinca added.