Trade officials, however, allayed consumer fears this would make basic commodities more expensive, saying competition in the market would keep prices down.
In a meeting of the National Price Coordination Council (NPCC) on Wednesday, various government agencies agreed to scrap the requirement for industry groups to seek DTI approval for their SRPs. The resolution will be effective immediately.
The DTI used to study and approve the price benchmarks for everyday food items like rice, bread and canned goods, as well as other necessities like essential drugs, laundry soap and candles.
However, Trade Secretary Ramon Lopez said this was unnecessary. Prices of consumer goods — even those brands not covered by the DTI — have been seen to stay steady, if not on the decline over the last year.
“This proves na balewala yung approval system. Balewala. It’s bureaucratic red tape lang,” Lopez said during a press briefing.
[Translation: This proves the approval system is useless. Useless. It’s just bureaucratic red tape.]
He said industries were competitive enough, so companies needed to keep to the SRP — or go even lower — so they could have a share of the market.
“If you raise your prices just because you feel like it, you price yourself out of the market and you lose business,” Lopez said.
The industry for processed meats, for example, has as much as 34 players monitored by the DTI. About 23 companies have canned fish products. There are eight makers each of bread and drinking water, not even including the home brands of supermarkets.
Steven Cua, president of the Philippine Amalgamated Supermarkets Association, confirmed this. Brands not covered by the DTI also showed marginal, if not negligible, price increases.
“The only brands that have raised prices by as much as 10% are upmarket brands, and only usually for their larger sizes or more expensive variants,” Cua said in an interview.
The Philippine Competition Commission (PCC) also issued a statement on Wednesday backing the move, saying market forces were more efficient in adjusting prices for consumers.
Despite the removal of pre-approvals, both the DTI and the PCC said they would continue to oversee the prices of basic commodities to ensure they weren’t being manipulated.
“When prices move, we must assess if the movement is due to certain changes in the market, say, changes of condition of inputs, or if the movement reflects collectively organized or coordinated efforts like collusions or cartels,” PCC Chairman Arsenio Balisacan said.
The DTI and PCC are also working on an agreement that will let the two agencies share information and work together to target any price-fixing schemes.
Sugar prices going down?
In the same meeting, the NPCC agreed to monitor sugar prices more closely.
According to their estimates, mill gate prices for refined sugar have dropped to about P1,800 per sack from about P2,100 per sack over the last two months. Retail prices, however, have remained at about P56 a kilo. The NPCC wants to see it go down below P50.
Lopez said, “I think it’s in the processing. Supermarkets say they haven’t changed prices because they’re still getting the same prices from their suppliers.”
He said the review would likely happen next week. The Council is already writing to sugar suppliers, asking for an explanation for their selling prices.
Metro Manila (CNN Philippines, April 6) — Business groups will now be allowed to set their own suggested retail prices (SRP) with no prior approval from the Department of Trade and Industry (DTI).
