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Retail price hikes need DTI okay

Ma. Elisa Osorio  - The Philippine Star
This content was originally published by The Philippine Star following its editorial guidelines. Philstar.com hosts its content but has no editorial control over it.

MANILA, Philippines – As the high cost of fuel continues to push up prices of basic goods, retailers are now required to get government approval for any upward price adjustment.

“We have to get the approval of the government,” said Steven Cua of the Philippine Amalgamated Supermarkets Association or Pagasa on the sidelines of the National Price Coordinating Council (NPCC) meeting on Friday. The government laid down the new rule at the NPCC meeting.

“We are supposed to report it (price hike),” he said.

Cua said retailers are required to justify any price increase with the Department of Trade and Industry.

But he stressed it’s not a form of price control because the DTI does not dictate prices.

“We have to tell them by how much the manufacturers raised their prices and then our other costs and how much margin we are getting,” he said.

Cua said the NPCC meeting was hastily called and came in the wake of increases in the prices of canned goods.

Trade and Industry Secretary Peter Favila confirmed the new ruling and said it is meant to keep the public informed.

“This is an effective way to prevent the public from speculating. Informing consumers of these things will prevent finger-pointing on who’s at fault,” he said.   

Favila said that as of yesterday no industry has yet signified intention to raise prices. “Hopefully it will stay until the end of third quarter,” he said.

“Although the ideal setting is that prices are maintained at a level that satisfies the public, this cannot always be the scenario because there are factors that drive prices beyond what we can control,” Favila said.

He said such factors are fuel costs and the peso-dollar exchange rate.

Prices of canned goods like luncheon meat, sardines and corned beef increased this month. Prices are expected to rise further by the end of the month as the cost of tin plates continues to rise due to high demand in China ahead of the Beijing Olympics.

The current retail price of canned sardines ranges from P10.50 to 11.50 per 155-gram can.

“While prices of majority of basic goods such as chicken, pork, milk, sugar and flour have remained stable during the past three months, the rising cost of tin plates in the world market has inevitably led manufacturers of canned products to adjust their prices by up to P0.35 to P0.40,” Favila said.

Meanwhile, prices of some basic goods – including chicken, pan de sal, bangus (milkfish) and sugar – are expected to remain stable at least until the end of the month. The price of rice being sold by the National Food Authority still ranges from P18.25 to P25 per kilo.

Canned goods’ prices still up

The price of canned goods is expected to remain high until September as prices of tin plates are still unstable.

“The demand of China has affected the price of tin plates. We thought it will end after the Olympics but because of the earthquake we are having second thoughts,” Henry Tañedo, chairman and president of the Tin Can Manufacturers Association of the Philippines, said.

The Beijing Olympics is in August but Tañedo said the demand will not slacken because of the massive re-construction in the aftermath of a powerful earthquake in Sichuan province recently.

Tañedo said they hope to get a clearer picture by the last week of July.

“The order for the fourth quarter will come at the end of July. The price will depend on the demand,” he said.

The price of sardines, corned beef and luncheon meat will increase by another six to seven percent toward the end of the month.

“There will be two increases in the prices of canned food products this month because some manufacturers opted to adjust their prices twice instead of implementing one big price increase,” Tañedo noted.

According to Tañedo, the price of tin cans went up by 12 to 15 percent this month as the cost of raw materials continued to rise.

BEIJING OLYMPICS

CANNED

CUA

FAVILA

PRICE

PRICES

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