MANILA, Philippines – President Arroyo has directed Trade Secretary Peter Favila to meet with members of the flour milling industry and bakers to find ways to keep the prices of bread and similar products down.
Deputy Presidential Spokeswoman Lorelei Fajardo disclosed the directive following reports that bakers are set to increase the price of loaf bread by a peso and shrink the size of pan de sal, a Filipino breakfast staple, due to rising flour prices.
Wheat flour, which is imported, accounts for about 70 percent of the cost of local bakery products.
Prices of wheat flour in the world market have been rising due to soaring fuel costs and environmental factors.
The bakers plan to hike their prices after flour millers refused to cut prices.
“President Arroyo will work hard to keep bread available and affordable, especially to poor households. She has instructed the DTI (Department of Trade and Industry) to negotiate and hold dialogues with flour millers and bakers to temper the price increase,” Fajardo said.
Lucito Chavez, vice president of the Philippine Association of Bakers, said the price of loaf bread is expected to go up by P1 and the size of pan de sal would likely get smaller.
Chavez said bakers were not getting discounts on flour even before millers had announced they were posting heavy losses this year.
Ric Pinca, executive director of the Philippine Association of Flour Millers, said millers could not afford to give discounts to big bakers.
“We already agreed to a rollback. We cannot give them discounts anymore because anyway they are big players,” Pinca said. Big bakers were receiving discounts of up to P30 per bag of flour, but this privilege ended last month.
Favila earlier warned flour millers against implementing any unjustified price hike and reminded them of their previous commitment to provide documentary evidence that the increases were justified.
He said during a recent meeting that representatives of the millers claimed that the flour they are unloading now in the market were bought three months ago at high prices.
“I told them to show me the data because if that (claim) can be proven, we could understand that. But if they can’t show the data and they increased prices, I will invoke the Price Act (of 1992) and that’s going to hurt,” Favila said last week.
The official was referring to Republic Act 7581 or “An Act Providing Protection to Consumers by Stabilizing the Prices of Basic Necessities and Prime Commodities and by Prescribing Measures Against Undue Price Increases During Emergency Situations and Like Occasions.”
The law provides, among others, that “if the prevailing price of any basic necessity is excessive or unreasonable, the implementing agency may recommend to the President the imposition of a price ceiling for the sale of the basic necessity at a price other than its prevailing price.”
The Act also empowers the Trade and Industry Secretary, as head of the National Price Coordinating Council, to push for the prosecution of firms found to be engaged in profiteering or cartelizing to manipulate prices.
Under the law, anybody found guilty of illegal price manipulation may be imprisoned from five to 10 years and fined anywhere from P5,000 to P1 million, or both, at the discretion of the court.
Fajardo also said Mrs. Arroyo remains committed to keep the prices of basic commodities stable, and one move she undertook was ordering the Department of Science and Technology (DOST) to come up with a long-term solution by procuring necessary equipment for the mass production of flour from locally-grown vegetables.
DOST officials said it may take the agency two to three months to acquire the necessary equipment for the mass production of flour from starch-rich vegetables and tubers.
Presidential Management Staff chief Cerge Remonde said cheaper vegetable flour can be mixed with imported flour to lower the cost of bakery products.