The first quarter of any given year is traditionally a slow period for stores in the Philippines. Demand for foodstuff and other consumer items usually tapers off by this time after the buying frenzy during the Christmas holidays. Because of this, the pace of price hikes in the January-to-March period is usually slower.
The African swine fever (ASF), however, disrupted this pattern in recent years. Pork was the single biggest reason behind the acceleration of the inflation rate in the early part of 2021. (See, “Pork prices push up inflation to 2-yr high in January; 4.2% data tests BSP policy,” in the BusinessMirror, February 5, 2021). At the time, consumers saw double-digit increases in the price of their favorite protein source due to supply constraints caused by the fatal hog disease.
A recent warning issued by the Department of Agriculture that the country will again experience shortages of key commodities by the end of the year could again put pressure on inflation in the early part of 2024. In the DA’s presentation during a recent House Committee on Agriculture and Food hearing, the agency signaled that the country would end 2023 with thin supplies or deficits in pork, fish, corn and onion. (See, “Shortages in key food stocks seen by yearend,” in the BusinessMirror, November 21, 2023). The corn deficit was estimated at 712,206 metric tons, while the fish shortfall was pegged at 38 days.
What could compound the food supply situation of the Philippines is the expectation that India is not lifting its restrictions on rice exports anytime soon. Bloomberg reported that India—the world’s top rice exporter—will maintain its curbs on overseas sales well into a next year. (See, “India seen keeping rice export bans into 2024, holding up global prices,” in the BusinessMirror, November 20, 2023). This will be problematic for the Philippines particularly if El Niño rears its ugly head, which could result in droughts in rice-producing areas.
Unfortunately for consumers, these signals mean opportunities for unscrupulous traders to again make a killing from the sale of commodities that are in short supply. The country saw this last year, when onion prices skyrocketed to unprecedented levels. This happened despite the warning made by officials of the Bureau of Plant Industry that there will be a shortfall of onion during the fourth quarter of 2022.
Threats of sanctions or imprisonment have yet to deter hoarders or profiteers from taking advantage of supply shortfalls. There’s a need for authorities to carry out these threats and put hoarders and profiteers behind bars. Until now, the government has yet to prosecute the people behind the mess that was the spike in onion prices during the last quarter of 2022.
The state must unmask these profiteers and hoarders and file cases against them to protect consumers, particularly those belonging to the Bottom 30 of the population. The current administration needs to show its resolve to win the fight against hoarding and profiteering if it is to make good on its promise to improve the quality of life of every Filipino.