The Department of Trade and Industry (DTI) is looking at possible stockpiling of basic agriculture goods like frozen meat to ensure sufficient supply and prices of these products in light of rising oil prices brought about the crisis between Russia and Ukraine.
This developed as the National Economic and Development Authority (NEDA) said a P1-average increase in fares would have a 0.3 percentage point impact on inflation.
Rosemarie Edillon, NEDA undersecretary, during the lower house’s fuel crisis ad hoc committee meeting yesterday the agency NEDA is also looking at other “triggers” on inflation as an increase in fare will snowball into wage hikes.
At the Laging Handa public briefing, DTI Undersecretary Ruth Castelo said the department and other agencies can also recommend to the President the imposition of price ceilings, if necessary, on certain products, to cushion the impact of higher oil prices.
But for now, Castelo does not see the immediate effect on prices of basic and prime commodities of the cost of oil , saying manufacturers have as long as 90 days in inventory.
“It will be about three months before we see the effect of the crisis. So we hope this will end soon. We have enough supply of products as of the moment,” said Castelo as she urged the public not to panic.
Castelo also assured the DTI will temper any adjustments if there will be.
She said the DTI has so far received only one request, from sardine manufacturers, after the crisis but this has more to do on the cost of fish than on oil.
Castelo said the stockpiling is being discussed initially of frozen pork, mostly imported, and chicken from local sources.
Castelo said the Price Act has a mechanism that grants automatic price freeze during a state of calamity which will have to be declared by the President.
She said through the National Price Coordinating Council, upon the recommendation of government agencies, can recommend to the President the imposition of price ceilings. For DTI, this would cover manufactured food products and some non-food items.
For now, Castelo said the inventory levels are good for 30 up to 90 days.
Castelo said the DTI is also appealing to manufacturers to go on easy on requesting for adjustments.
“The DTI is also calibrating the release of suggested retail prices (SRPs) as this implies there will be a price increase.
The latest SRPs took effect on Jan. 27, 2022.
At the House hearing, Edillon said fuel subsidy is being pushed so that there will not be a significant increase in the fare hike.
“Some reasonable fare increase would be okay, but it might not be enough to fill the increase in oil prices, that’s why we think that the government also has to provide subsidies,” she added.
In the same hearing, NEDA director Reynaldo Cancio said the estimated impact of the oil price hikes on the economy is around 0.3 to 0.9 percentage points which Albay Rep. Joey Salceda is equivalent to a nominal value of P330 billion.
The country’s headline inflation rate remained at three percent in February 2022.
Despite the stable inflation rate, Karl Kendrick Chua, socioeconomic planning secretary, said that commodity prices are increasing amid the conflict between Russia and Ukraine.
Meanwhile, presidential adviser for Entrepreneurship Joey Concepcion increased local economic activity will help the Philippines weather the crisis brought about by the conflict.
“It’s now become more urgent for the Philippines to maintain its Alert Level 1 status until the end of the year. To do this, we have to continue to vaccinate, booster and keep our COVID indicators under control,” Concepcion said in a statement, adding lockdowns and restrictions have been particularly harmful to the economy as it is highly dependent on mobility.
Norberto Chingcuanco, co-convenor of Tugon Kabuhayan, said in an online briefing yesterday, government must start negotiating for supply of raw materials of feeds and consider the possible reduction in their tariffs.
These include corn, rice bran, copra meal, cassava, soybean meal, fishmeal, coconut oil, salt and assorted vitamins and minerals which are imported mainly from the United States, Australia, China, Canada including European countries like Russia and Ukraine. The Philippines also imports some from Southeast Asian countries like Malaysia, Vietnam and Thailand.
Asis Perez, convenor of Tugon Kabuhayan, warned of higher prices of agricultural products as a shortage on animal feeds will likely result in lower production of the animal and aquaculture industries.
Samahang Industriya ng Agrikultura (SINAG) is requesting for a P21 per kilogram support price of palay with the onset of the harvest season following the continuing hikes on oil prices.
Rosendo So, SINAG chair, said the cost of producing play has gone up by P5 per kilogram (kg) in the two previous harvests to P19 per kg from last year’s P14 to 15 per kg.
SINAG said the suspension of fuel excise tax and value-added tax will be more helpful to farmers than the fuel subsidy.
“Fuel subsidies as proposed by the DA will not lower the production cost of farmers. Suspending the excise tax and the VAT will automatically reduce fuel prices by P7 per liter… Rice farmers are harvesting now and we are asking the government, through the National Food Authority to buy the palay at P21 per kg so that farmers can earn as at P19 per kg will just be a breakeven point,” So added. – Irma Isip and Jed Macapagal
