Prices of basic goods seen stable despite wage increase

MANILA, Philippines - Prices of basic goods are seen to remain stable even as the government approved a pay hike for minimum wage earners in Metro Manila, the Department of Trade and Industry (DTI) said.

Trade Secretary Gregory Domingo said in a text message the minimum wage hike in Metro Manila is not expected to result in an increase in the prices of basic goods.

Last week, the Regional Tripartite Wages and Productivity Board composed of  representatives from labor and management and the government such as the DTI, National Economic and Development Authority and Department of Labor and Employment (DOLE) approved the P15 wage increase of 587,000 minimum wage earners in Metro Manila.

With the wage hike approved, DOLE-National Capital Region director Alex Avila said the take home pay of minimum wage earners will increase by 3.2 percent to P492.57 per day from P477.03 daily and they will also enjoy higher 13th month pay and increased social security coverage.

Like in the past year, he said employers are expected to be able to bear the cost of increase without hindering their growth and expansion as well as ability to provide more jobs.

As the wage increase is at three percent and wage is just a component of overhead of production cost which averages five percent, Trade Undersecretary Victorio Mario Dimagiba said there should be no impact on the prices of basic goods.

Should manufacturers plan to raise their prices, he said: “they should do the computation and submit justification.”

Oil prices, he added, also continue to go down.

Earlier this month, manufacturers of basic goods such as powdered milk and detergent soap slashed their selling prices given lower prices of raw materials and oil, as well as the easing of the congestion at the ports.

Among the manufacturers that have implemented new suggested retail prices (SRP) are Nestle Philippines, Inc. which is now selling the 150-gram Bear Brand powdered milk at P50 from P51 previously, and Snow Mountain Dairy Corp. which cut the price of the150-gram Birch Tree powdered milk to P57.10 from P58.10.

Alaska Milk Corp. also reduced its SRPs with its 150-gram powdered milk now sold at P44.15 from P45.15 previously, while its one-kilogram (kg) powdered milk is currently priced at P318 from the previous price of P368 and the 1.8-kg powdered milk has a new SRP of P512.50 from P632.50 before.

Unilever Philippines Inc. likewise imposed a new SRP for the 39-gram Surf Bar Blue detergent soap  at P18.50 from its previous price of P19.