As the country continuous to rely on importing manufacturing materials and agricultural commodities, an industry leader said the government should build manufacturing plants and cultivate agricultural land.
"Long-term solution is to stop importing. We don't have our own canning industry and we continue to rely on imported products from other nations such as China. Why do we continue to import even if we are an agricultural country? Importing is a band-aid solution, a shortcut, and a short-term solution," Philippine Amalgamated Supermarkets Association president Steven Cua told the Daily Tribune's online show Gising Na!
The Philippines has manufacturing plants that produce sardines, but the tin cans are imported from China.
It's the reason the Canned Sardines Manufacturers Association of the Philippines filed a petition to the Department of Trade and Industry for a P3 price hike on canned sardines last October.
The group said the strong dollar and weak peso affect the importation of tin sheets used in canning sardines.
Global demand for tin cans is surging, as the global metal cans market size reached $62.51 billion in 2021, while the market is expected to reach $73.78 billion by 2027, showing a compound annual growth rate of 2.8 percent from 2021 to 2027, according to global think tank Research and Markets.
"The government should find a solution on how to develop various industries beyond President Marcos' six-year term. Apart from that, there should be a continuation of his projects by the next chief executive," Cua added.
Not all products raise prices
Cua clarified that not all items or stock-keeping units or SKUs in supermarkets have raised prices.
"As of November, more than 30 manufacturers have aired intentions to raise prices to retailers, but not all products they carry are set to spike prices. A regular-sized supermarket has 15,000 different items, while hypermarkets have more than 100,000 items. Prices of SKUs are not raised altogether because manufacturers are afraid to lose market share," Cua explained.
Trade Secretary Fred Pascual last week said that no new suggested retail price or SRP bulletin for basic necessities and prime commodities will be released as the year ends. He hopes to release a new SRP by early 2023.
Cua said the DTI will have a hard time asking these manufacturers to defer the price increase as they are also suffering from the current economic situation, and SRP should not be implemented all year round.
"SRP is a form of price control and is supposed to be used only during times of calamities or emergencies. But the DTI made its implementation all year round. It is not good for the economy if you have price control because it's not free enterprise. Competition keeps us in check so SRP should not be needed, actually," he said.
The last SRP bulletin was issued by the DTI on 12 August, posting price increases for 67 out of 218 SKUs, which were granted due to rising production costs, varying from 3.29 percent to 10 percent.
Some of the basic commodities that were allowed price increases were canned sardines, coffee, noodles, bottled water, processed milk, detergent soap, candle, and condiments.
Cua said factors that make manufacturers adjust their prices are the ongoing Ukraine-Russia war, fluctuating oil prices, salary increases of manufacturing companies, costs of raw materials, and supply chain disruptions, among others.