The Department of Trade and Industry (DTI) assured that no manufacturers have asked yet to increase suggested retail prices (SRP) for basic goods and commodities amid the fuel price hike induced by escalating tension between Ukraine and Russia.
Trade Undersecretary Ruth Castelo said in a briefing over the weekend that the consumers will not yet see higher price tags when they do their grocery shopping.
“So hindi natin pa agad mararamdaman iyan and kung tumaas naman, can rest assured na lahat po ng manufactured food products dumadaan sa pag-aaral ng DTI (We will not feel the price increases immediately; and if the prices increase, you can rest assured that the manufactured food products will undergo DTI review),” she said.
In its price review, Castelo said the DTI “validates” the price hike and negotiates with manufacturers if the increase is too much of a burden for the consumers.
For now the trade official said the impact of oil price increases on the cost of production averages 3.5 percent, which is deemed minimal that the manufacturers shoulder the additional expenses.
To avert potential price hikes, Castelo said the DTI is providing assistance to manufacturers to assure the stable supply of basic goods and commodities.
Trade Secretary Ramon M. Lopez has directed the provision of assistance to manufacturers to keep production running, she said. This way, if ever prices increase along with the demand, the additional cost will not reflect on retail prices, Castelo added.
Should fuel prices continue to rise, however, Castelo noted that the Tax Reform for Acceleration and Inclusion (TRAIN) could mitigate this.
Under the TRAIN law, the scheduled increases in excise tax may be suspended when the average price of Dubai crude oil based on the Mean of Platts Singapore reaches least $80 per barrel.
“The uncertainties that can affect the major economies, their production, inflation and trade will eventually impact partners like us,” Lopez told reporters over the weekend.
“It is important that the conflict does not escalate further. Peace and development is still the best policy.”
Other commodities that can potentially be affected by the current situation in Eastern Europe are wheat, aluminum, platinum, nickel and copper, he enumerated.
Last month, the DTI released the updated SRP list for basic necessities and prime commodities for 216 shelf keeping units (SKUs), 73 of which saw an increase.
The products that saw SRP hikes include canned sardines, processed milk, bread, instant noodles, salt, detergent soap, bottled water, candles, processed canned meat and canned beef, toilet soap and battery. Some 20 of them saw a 1 to 5 percent increase, 43 rose by 6 to 10 percent, while the remaining 10 posted went up by over 10 percent.
Ongoing trade
The DTI chief also said that they “continue commercial relations with Russia, Ukraine and the West.”
“We continue to trade with all and develop mutually beneficial development, trade and investment collaboration with all,” Lopez assured.
In fact, Lopez said the country’s Joint Commission on Trade and Economic Cooperation (JCTEC) with Russia “have no changes on pace.”
In 2017, the Philippines and Russia hosted their inaugural meeting for their JCTEC in Manila.
The economic initiative seeks to enhance bilateral economic relations between the countries. Among the areas of collaboration they previously discussed are trade and investment promotion, industry development, labor, higher education, agriculture, energy, transport and atomic sphere and space exploration.
Jobs recovery
Meanwhile, Lopez said government is “optimistic” that the Philippines will generate 800,000 jobs this year as the country moves to ease mobility restrictions. This is in addition to the 1 million jobs pledged by the National Employment Recovery Strategy Task Force.
He added that the employment level is even “getting close” to pre-pandemic figures as the unemployment rate declines.
“If lesser or no restrictions, we can go back to around 5-percent unemployment,” he said.
The trade chief said the Inter-Agency Task Force for the Management of Emerging Infectious Diseases is still finalizing the new alert level in the National Capital Region and other provinces.
Metro Manila and most parts of the country are under Alert Level 2 until the end of February.
He said the businesses can “expect lesser restrictions” and “removal of physical barriers,” among others.
Still, Lopez stressed the need to continue the rollout of the vaccination program and implementation of minimum health protocols.
Business groups have been pressing to ease the quarantine measure to Alert Level 1 to encourage spending, especially for tourism as the summer season approaches.
Image credits: NONIE REYES