EDITORIAL
Good but not good enough
As food inflation at the national level rose to 8.2 percent in August 2023 from 6.3
percent in July 2023, the government has started intervening to protect the vulnerable
sectors.
Early this month, President Marcos issued an executive order imposing a price
cap on the retail prices of rice, a staple food in the country.
Recently, fourteen (14) manufacturers of canned goods requested the
Department of Trade and Industry (DTI) for suggested retail price (SRP) adjustments
due to the high cost of major raw materials, packaging materials, fuel costs, wages, and
other costs that affect the production of these essential goods.
Although the DTI announced that the manufacturers decided to absorb the bulk
of rising costs, public interviews with some representatives of this sector revealed that
SRPs are mandated on them despite the law on suggested retail price requiring that the
proposed SRPs should be submitted on the consent of the manufacturers.
“What happens is it becomes dictatorial. It’s mandated on us. There is nothing
we can do if the government wants.” This was the statement of Canned Sardines
Association of the Philippines executive director Francisco Buencamino.
With production costs of canned goods experiencing an estimated increase of 10
to 15 percent, the products will only have an upward price adjustment of 0 to 4
percent. Buencamino cautioned that sardines manufacturers will be forced to decrease
production if the DTI does not restore the P3 on the retail prices of the canned
food.Sardines manufacturers will not be able to endure if the price adjustment will be
put on hold until the end of the year.
Trade Secretary Alfredo Pascual said on Thursday that the government is
seriously considering lifting the cap on rice prices as prices have started to stabilize.
The recent development shows that price controls setting the legal minimum or
maximum prices set for specified goods are temporary measures that the government
can impose in the shortest time possible.
Price controls may be enacted with the best intentions, but they often don’t
work. Good intentions alone, when acted upon, may have unintended consequences.
The government still needs to address the root cause of the problem.