Prices of basic goods remain unchanged

MANILA, Philippines - There should be no changes in the prices of basic commodities, including cement, as these adjustments have not received any permission yet from the Department of Trade and Industry (DTI), a trade official said.

At the same time, the government is looking at buying sugar from other countries and provide tax subsidies in order to arrest further increases in the price of sugar, the DTI said.

“We are not against any increase in price but we are against unjustifiable and abusive increases,” Trade Undersecretary Zenaida Maglaya said. She said they understand that prices must go up but it must be justified. “We do not want production to stop.”

It has been reported that the price of flour has already gone up by P20 per bag. As a result, bread prices are scheduled to go up by next month. Sugar prices have likewise gone up.

In a press conference, Maglaya said Agriculture Secretary Arthur Yap and DTI Secretary Peter B. Favila are already looking at importing sugar with tax subsidy as a result of the increasing prices in sugar.

The Sugar Regulatory Authority (SRA) has already said that they fear prices can reach up to P50 per kilo. However, the suggested retail price (SRP) for sugar is only P43. Sugar is currently being sold for P48 per kilo.

Maglaya said they have already received a proposal to increase the SRP to P44 to P45 per kilo. The adjustment in SRP has not yet been approved because the DTI is still waiting for an endorsement from Yap.

Maglaya said they can easily import cheaper sugar even if world prices are increasing. She noted they were able to do it with rice before wherein the government bought rice from the Vietnamese government.

“If we were able to do it before, we can do it again,” she said.

Meanwhile, flour prices ex-mill will have to go up by P20 per bag this month due to the higher cost of wheat in the world market brought about by the premium on protein, the Philippine Association of Flour Millers (PAFMIL) said.

According to the millers, recent harvests of wheat by the exporting countries are of lower protein, causing the suppliers to put a higher price tag on high protein wheat.

Depending on the mill, brand and quality, flour prices at P750-P770 per bag for hard flour and P650-P670 per bag for soft flour. These are ex-mill prices or the price of goods picked up at the mills. Retail prices especially in the provinces are higher due to transport costs and margins of local traders.

Hard flour is used for breads such as pandesal, loaf bread and monay, among others. while soft flour is for pastries, cakes and cookies.

World wheat prices are still expected to further go up as the supply depletes until the next harvest sometime in October this year.

The Philippines bought two million tons of wheat last year around 65 percent of which is the high protein Dark Northern Spring (DNS) wheat from the United States, Canada and Australia. The DNS wheat is known as the “Mercedes Benz” of wheat due to its high protein content which local bakers prefer due to its consistent rising quality. The US supplies around 90 percent pf the Philippine wheat requirements.

The Philippines is the fifth largest buyer of US wheat with 1.7 million metric tons purchased in 2008. Japan is the leading buyer (3.3 million) followed by Nigeria (2.7 million), Mexico (2.6 million) and Egypt (2.1 million).