By IRMA ISIP and JED MACAPAGAL
Business groups have expressed fears government’s inflation target for this year and in 2024 will not be attained if the looming legislated wage hike is implemented, already aggravated by the expected increases in fuel prices for the rest of 2023.
Sergio Ortiz-Luis, president of the Employers Confederation of the Philippines Inc., said inflation could hit 5 to 6 percent for 2023 against government’s target of 2 to 4 percent.
“The 2 to 4 percent inflation target in 2024 might not be attained,” said Ortiz-Luis at the Pandesal Forum on September 15 where he and leaders of the Philippine Chamber of Commerce and Industry, the Federation of Filipino-Chinese Chamber of Commerce and Industry Inc. (FFCCCII) and the Philippine Amalgamated Supermarkets Association Inc. released a joint statement calling on lawmakers to reconsider the proposed legislated wage hike and to leave the decision to tripartite consultations.
The groups said salary increases will affect mostly informal workers and small business owners since it will lead to higher inflation which is harmful to both business and the economy.
“Businesses especially MSMEs (micro, small and medium enterprises) are struggling with difficulties now and another wage increase might hurt businesses as well as worsen inflation too.”
Rino Abad, director of the Department of Energy’s (DOE) Oil Industry Management Bureau, in a television interview over the weekend said the string of oil price increases, the 9th consecutive week last week, will continue until December.
Abad said the world is facing 500,000 barrels of deficit on oil per day following the decision of the Organization of the Petroleum Exporting Countries and its members to cut production.
On top of that, most economies have decided to no longer implement additional central bank rate hikes.
“Rollbacks have been implemented in the earlier part of the year due to the rate hikes. That is the only way to temper the economic growth of countries…,” Abad said.
He cited DOE’s estimates which said petroleum price hikes on Tuesday may be above P2 per liter for diesel and kerosene and below P2 per liter for gasoline.
Some fuel companies announced over the weekend that per liter increases for this week could be at P1.80 to P1.90 for diesel and P1.20 to P1.30 for gasoline.
Cumulative per liter increases the past nine weeks stand at P9.85 for gasoline, P14.05 for diesel and P13.45 for kerosene.
In a radio interview on Saturday, ahead of the September 21 meeting with officials of the Department of Trade and Industry (DTI), manufacturers cited rising cost of production such as raw materials and fuel as well as the peso depreciation as the primary reason for reiterating their petition for price hikes that have been pending with the agency.
In the same interview, DTI assistant secretary Mary Jean Pacheco said DTI Secretary Alfredo Pascual has directed the Consumer Protection Group to find ways to help lower the prices of basic and prime commodities (BNPC) by helping manufacturers reduce the cost of production.
Pacheco said DTI will not just focus on enforcement but will pursue a mandate in the Price Act that allows government to fix productivity issues of BNPCs such as transport and distribution and raw material sourcing.
“We will hold industry focus dialogues and check on their costs and how government can help reduce their cost of production,” Pacheco said.
She said DTI in coordination with other agencies will seek support to lower cost of freight and other shipping charges for imports and to eliminate pass-through fees charged by local governments.
Pacheco said DTI will help manufacturers find alternative sources of raw materials such as in the case of canned meat, for mechanically deboned meat where concerns on reference values were raised.
For sardine manufacturers, Pacheco said the DTI will seek the help of the Department of Agriculture in sourcing tamban and tomato paste.
