The Department of Trade and Industry (DTI) has reassured consumers that it will continue to monitor suggested retail prices (SRPs) to ensure no sudden spikes in prices of goods and commodities will ensue, but still plans to keep its hands off price setting.
Last week Trade Secretary Ramon M. Lopez expressed his intent to “deregulate” the SRP scheme, at least from the side of the DTI, which has exercised supervisory authority on price adjustments of manufacturers.
Four government agencies, aside from the DTI, are mandated to issue SRPs, namely, the departments of Agriculture, Health, Environment and Natural Resources and Energy.
Manufacturers of basic goods and prime commodities, classified as daily necessities of Filipinos, such as bread and canned meat, are enjoined by the DTI to submit their price adjustments periodically to ensure these stay within reasonable ranges.
These are evaluated and undergo an informal approval process with the DTI.
There have been instances in the past when the DTI has sued private companies, on charges of profiteering, for failing to explain their pricing levels.
These SRP schedules are also used as the guides of the DTI’s monitoring teams to ensure supermarkets and retailers stay within the range recommended by the manufacturers.
The said scheme has reportedly put the squeeze on both the manufacturers and retailers, since the former has to keep production costs down if the DTI does not approve their upward price adjustments, and the latter as it ties their hands to put a large profit margin.
While the DTI has not categorically said it will no longer issue SRPs, it had expressed to loosen its grip on the approval process of SRPs, especially in fast-moving consumer categories where market forces keep prices low.
“We all know prices are very competitive and kept low by market forces in fast-moving consumer categories, with many brands and players, and presence of even generic products available in public markets. This has been true for many decades,” Lopez clarified on Monday.
He maintained the DTI will still monitor the competitiveness structure per industry.
Lopez earlier said the DTI will support the Philippine Competition Commission in its identification and resolution of anticompetitive behavior.
On industries or product categories that are dominated by a few players, Lopez said he still intends to oversee the market competition.
“We have to continuously review the industries participated in by a few players,” he stressed.
Laban Konsyumer Inc. Head and previous Trade Undersecretary for Consumer Protection Victorio Dimagiba said his consumer advocacy group will oppose any move on the lifting the SRP on basic goods.
“With the inflation at 3 percent, the timing is not good. The onion and garlic cartel activity, and the profiteering that happened which caused prices to jump are lessons learned. There was no SRP in place,” Dimagiba said in a news statement given to reporters.