DTI opposes removal of SRP on basic goods

MANILA, Philippines – The Department of Trade and Industry (DTI) said there is no need to remove the suggested retail price (SRP) tag for basic necessities and prime commodities as its absence would only lead to price abuse.

In a letter to the Department of Justice (DOJ), Trade Undersecretary Victorio Mario Dimagiba explained the reasons why the imposition of SRP must continue.

“Setting by the DTI of SRP for basic necessities and prime commodities should be maintained. Absence of SRP could prompt some manufacturers, distributors or retailers to take advantage and increase prices at unreasonable levels,” he said.

“SRP is used as a tool to ensure there is no profiteering or the sale of any basic necessity or prime commodity at a price grossly in excess of its true worth which is prohibited under the Price Act,” he said.

“The SRPs are set by manufacturers themselves and not by the DTI. The manufacturers assure DTI the SRPs are reasonable and reflective of the true worth of their products,” Dimagiba added.

He stressed the DTI evaluates any adjustment in the SRP based on the changes either in the prices of raw materials and other production costs.

“To ensure that any adjustment in the SRP is reasonable, the manufacturers are required to inform and submit supporting documents to DTI before they could implement any price increase,” Dimagiba said.

The DOJ on Monday recommended a review of the SRP for lack of adequate rules or guidelines, saying the policy is detrimental to public interest by restricting competition and improvement of the quality of commercial products.

For its part, DTI said SRP is used as basis in its monitoring and enforcement activities under the Price Act.

“SRP partakes of the nature of an advisory as it informs the consumers that the covered goods are reasonably-priced and within the accepted profit margin. With the SRP, retailers are precluded from unreasonable price increases on the products that they are selling,” Dimagiba said.

“As for the manufacturers, the SRP has been helpful in the promotion of their products. In fact, some manufacturers of Noche Buena products and school supplies request that their products be included in the guide prices being issued by the DTI,” he added.

Dimagiba also said the imposition of SRPs in basic necessities and prime commodities fosters free and fair competition among the manufacturers, supermarket, and grocery owners.

“When the manufacturer of a leading brand of milk and coffee announced a price rollback, the other manufacturers followed suit,” he said.

“Even with SRP, we observed that market forces and competition of brands in the retail market dictate the prices in the market. Historical data shows that monitored prices of basic necessities and prime commodities remain lower than the SRPs,” Dimagiba added. –Richmond S. Mercurio (The Philippine Star)