DTI warns of more price increases

THE Department of Trade and Industry (DTI) warned of higher prices of various basic necessities and prime commodities amid the unabated increase in global demand and prices.

After a National Price Coordinating Council (NPCC) meeting on Friday, DTI Secretary Gregory Domingo told reporters that the government cannot do anything about rising prices except ensure that manufacturers and retailers would not take advantage of consumers.

“We can’t avoid price increases because they’re on a global scale,”
Domingo, who co-chairs the NPCC, said.

DTI Undersecretary Zenaida Maglaya said the price of cooking oil or lapad doubled to P33 from P15 last year, while copra prices tripled to P61.94 per kilo from P20.39 a kilo a year ago.

Domingo said the growing global demand for cooking oil is causing local prices to shoot up. “Our cooking oil exports are increasing, while the domestic supply is shrinking,” he said.

Prices of canned corned beef have already risen between 8 and 9 percent as tin can prices went up between 2 and 3 percent, said Francisco Buencamino, Philippine Association of Meat Processors Inc. executive director.

Domingo said flour prices are expected to rise in the coming weeks to about P850 per 25-kilogram bag from the current P820 to P830 a bag, as global wheat prices hover at all-time highs—more than double last
year’s prices because of higher global demand amid slower production of wheat-producing countries.
Wheat is milled locally into flour.

The DTI chief said wheat prices this month have increased 15 percent from January.

He is not discounting flour prices hitting P900 per sack if global wheat prices do not stabilize.

He said the DTI is asking bakers to hold off bread price increases, especially of the cheaper Pinoy Tasty variant.

Bakeries last month jacked up by P2 to P38 the price of the 450-gram bread loaf, citing rising prices of sugar, flour, oils, shortening, liquefied petroleum gas and packaging materials as well as higher transportation and distribution costs.

Walter Co, Philippine Baking Industry Group president, said bakers’ associations would likely adjust prices by March if flour prices continue their upward climb.

Sugar prices however are expected to stabilize as the milling season goes on full swing, even though production was 200,000 metric tons lower than last year because millers’ operations began a month late, Maglaya said.

The prices of sugar hit a high of P70 per kilo, although prices are seen to taper off to between P60 and P64 a kilo because of slow demand, said Regina Martin, Sugar Regulatory Administration head.

Domingo said sugar prices should be about P58 per kilo in two to three weeks’ time.

The Bangko Sentral ng Pilipinas (BSP) on Thursday raised its inflation forecast for this year to 4.4 percent from the original estimate of 3.6 percent. Despite the higher forecast, the central bank maintained that price increases would stay within its target range of 3 percent to 5 percent.

In a research note, First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) said inflation would stay at 3.2 percent in the first half of the year, ascribing this to the stable rice and oil prices despite concerns about the increases in tolls, transportation fares, and wheat and corn prices.

“We think that the inflation scare is overblown, given that rice stocks are plentiful. Harvests are quite promising according to Department of Agriculture experts, and crude oil prices are likely to ease,” FMIC-UA&P said.

Inflation last month hit a four-month high of 3.5 percent, and hovered at the high-end of the BSP forecast range of 2.7 percent to 3.6 percent for January.

It has kept policy rates at record lows of 4 percent for the overnight reverse repurchase rate and 6 percent for the overnight repurchase rate since July 2009. –Ben Arnold O. De Vera, Reporter with report from Darwin G. Amojelar

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