THE government will impose a price ceiling on chicken and pork in a move to stabilize prices of wet goods and reduce the probability of profiteering as the holidays near, according to Trade Secretary Ramon M. Lopez.
The Departments of Trade and Industry and of Agriculture (DA) on Monday decided to place a price cap on chicken. Under this regulation, the selling price of poultry products should only be P50 higher than its farm-gate price.
“On chicken, we agreed [and] we will issue a formal MOA [memorandum of agreement] with the DA to impose a moving price ceiling. In other words, it will move with farm-gate prices, [so that] we can control the dressing, the logistics and the trading in between the farm gate and the retailing,” Lopez told reporters.
“Our maximum cap is P50 only. We will work out the details, but, offhand, the thinking is it will be updated every three days, so that it will be a moving price target,” he added.
Lopez claimed the average farm-gate price of chicken early October is P82 per kilo. Based on this, the selling price could only go at a maximum of P132 per kilo with the price ceiling in effect.
“This is what is going to happen in principle, [and] we will just put this in writing, so that we can have that SRP [suggested retail price] in place in hopefully two days’ time [Wednesday],” Lopez explained.
The trade chief argued the price cap will not only stabilize the prices of chicken, but will also put pressure on traders and retailers to shun profiteering in time for the holidays.
Those caught defying the price ceiling will first be issued a letter of inquiry for them to correct their price.
“If they won’t, they will be issued a notice of violation [and will be penalized] depending on the gravity and the size of the business. They will be given that penalty, so that we can force retailers to follow, even the traders supplying them to work within that set price,” Lopez said.
On top of poultry products, the government is looking to do the same for pork, but has yet to discuss the regulation with hog raisers. Either way, the same provisions will apply to pork, according to Lopez.
“Eventually, we will do this for pork, but we have yet to have an agreement with the pork people. For pork, the same rule of thumb will be implemented between farm gate and retail, but we will have to institute that also,” he said.
Leaders of wet market associations will be tapped by the government in ensuring the price ceiling is observed in their respective areas, Lopez added.
Government economists are struggling to weather the prices of basic goods, as inflation, or the general increase in commodity prices, rose 6.7 percent in September, according to data from the Philippine Statistics Authority. The highest inflation in almost 10 years put the average at 5 percent, way beyond the Central Bank’s target range of 2 percent to 4 percent for this year.
The implementation of a price cap on basic commodities is viewed by lawmakers and consumer groups as one measure to prevent further hikes. Consumer group Laban Konsyumer Inc., for one, has repeatedly called on Lopez to enforce a moratorium on any price increases on basic goods, as pressures on supply and demand could trigger another round of surges with the holiday season approaching.
However, the government is of the view that a price ceiling could worsen the situation, as producers and traders might resort to hoarding while the cap is in effect. It instead focused on beefing up the market with supply of staple, particularly rice, through importation.