THE country’s trade chief on Tuesday shunned government-imposed price ceilings and instead pitched for supply intervention as a way to arrest the rising prices of basic goods.
In an interview with reporters, Trade Secretary Ramon M. Lopez said he is far from recommending that President Duterte authorize imposition of price ceilings. Placing a price cap could only worsen the situation, as it could further shrink the supply of basic goods in the market, he argued.
Lopez also stood firm on his policy decision to arrest rising prices through supply intervention.
Over the weekend, he revealed the government has now required rice retailers, particularly those selling fancy premium rice, to sell regular and well-milled rice.
“In effect, this is a price control: the implementation of the SRP [suggested retail price] system. Let us call it that way because it is difficult to place a price control. With that [supply intervention], we are basically saying make it available. That is better than a price control [because], again, it might [further lessen] the availability of rice,” Lopez said in a mix of English and Filipino.
During a Senate deliberation on the proposed 2019 budget of the Department of Trade and Industry, Sen. Francis G. Escudero questioned why calls to impose a price ceiling apparently fell on deaf ears.
Escudero pointed out this might be the best time to put a cap on prices of basic goods, as government economists struggle to temper inflation. He added Lopez might be missing out on one of his key powers as trade chief, which is to recommend to the President the imposition of a price ceiling under the Price Act.
Under Section 7 of the Price Act, the President can impose a price ceiling upon the recommendation of an implementing agency or the Price Coordinating Council. The price ceiling can be utilized if there are widespread acts of illegal price manipulation, or the impendency, existence or effect of any event that causes artificial and unreasonable price hikes on basic goods.
Moreover, the price ceiling can be placed by the Chief Executive whenever the prevailing price of any basic good has risen to unreasonable levels.
“In effect, we will simply implement the SRP that has been out already. Part of effective implementation is to make sure that the items covered by that SRP [are] made available,” Lopez said, in defending his aversion to the idea of putting a price ceiling in place.
Image credits: Ceasar M. Perante