Business sector calls for measures to soften inflation

MANILA – Manufacturers and retailers of key commodities are calling for the institution of creative new measures to ease price pressures as the Bangko Sentral ng Pilipinas expects last month’s inflation to likely hover around the 8.5 to 9.3 percent range.

In an interview Wednesday, Steven Cua, president of the Philippine Amalgamated Supermarkets Association, said local food producers need support to lessen the country’s dependence on imported produce.

He said an over-reliance on food that is shipped in from abroad inevitably translates to higher retail prices.

“We really have to develop our own food production capabilities to protect the public against inflation,” he said.

Cua, whose group is composed mostly of medium-sized supermarkets nationwide, agreed that the BSP’s forecast accurately reflects actual price changes at the store front in February.

While volumes being sold by supermarkets remain largely unchanged despite price increases, he said consumers are noticeably inclined towards lower cost or sale items.

Lucito Chavez, president of the Asosasyon ng Panaderong Pilipino, appealed to the administration to offer soft loans and other affordable financing options to struggling community bakers.

He said many small bakeries are becoming “victims of economies of scale” and are unable to compete with large corporate bakeries.

Chavez said big baking corporations, some of which are foreign owned, are able to bulk purchase raw materials at preferential prices.

“Small bakeries cannot price themselves out of the competition despite their higher cost for the same raw materials, so they are forced to moderate their price increases to the point of only breaking even,” he added.

But Eastern Petroleum chairperson Fernando Martinez said there is reason to be optimistic because of recent developments in the world petroleum market, which is reportedly the origin of world inflationary pressures.

He said local pump prices of diesel have declined to levels where they are once again lower than the price of unleaded gasoline.

Martinez said while fuel prices have not settled back to their levels prior to the Russia-Ukraine conflict, the recent decline in the price of diesel is a “clear sign of improvement.”

“I think that some inflation forecasts may be higher than what we are actually seeing on the ground,” he said.

In its month-ahead forecast, the BSP said the upward price pressures in February were likely driven by higher liquefied petroleum gas (LPG) prices and elevated prices of key food items, such as pork, fish, egg and sugar.

On the other hand, the lower prices for domestic petroleum, fruits and vegetables, chicken and beef, along with the peso appreciation, could have contributed to easing price pressures, according to the monetary regulator. (PNA)