ECCP warns gov’t vs price controls

A foreign trade group warned yesterday against plans to impose price control on basic commodities amid rising prices, saying such a move would be detrimental to the country.

The European Chamber of Commerce of the Philippines (ECCP) said any form of price control may affect supply of commodities.

ECCP executive vice president Henry Schumacher said any measure that would curtail the free movement of commodities would only worsen the current situation.

“The availability of consumer goods must be the priority. Once price control is imposed, availability will severely suffer,” Schumacher said

“Oil companies, wheat millers, food processors and the bakers have no choice but to follow international raw material prices. If caps were to be introduced, they would be forced to stop operations. That would be in nobody’s interest,” he added.

Schumacher said they are supporting the actions of the Department of Energy of not returning to a regulated oil industry as any move to cap prices would put a heavy financial strain on national government coffers with an estimated $2 billion needed for a price stabilization fund.

Sen. Edgardo Angara said the government should prepare for a looming food shortage as increasing commodity prices brought about by the turmoil and instability in the Middle East and North Africa will have a grave impact on developing countries, like the Philippines.

Angara, in a privilege speech, warned that  “extreme poverty and malnutrition” can spark widespread unrests, unless the government address the problem.

He said the high cost of food is “a politically sensitive issue” in the Philippines as the bottom 80 percent of the population allots 60 percent of their expenditures on food, half of which goes to buying rice.

“The world is on the brink of an upheaval,” he said. “The prices of staple foods are escalating — causing widespread social unrest that has already toppled leaders in North Africa and in the Middle East.”

Citing the Food Price Index of the United Nations’ Food and Agriculture Organization, Angara said prices of commodities rose for the eighth consecutive month — averaging 236 points, its highest level since the index was first tracked in 1990. -Michaela P. del Callar, Daily Tribune