Price freeze on processed food, toll cuts for 2 months
The DOTr said that the discounts for “essential transport sectors” may be extended beyond two months, subject to review.
Toll Regulatory Board Executive Director Jay Art Tugade informed Acting Transportation Secretary Banoy Lopez about the discounts.
Lopez said the discounts “will be a huge relief for PUV drivers and commuters, as well as consumers.”
Not without costs
On Thursday, the DOTr announced a 50-percent discount for all passengers of Light Rail Transit Line 2 and Metro Rail Transit Line 3 starting also on March 23.
Reacting to the announced commitments to freeze prices, the retail industry group, Philippine Amalgamated Supermarkets Association, said retailers may eventually be forced to raise prices due to fuel price pressures.
Association president Steven Cua said commitments may be possible, particularly for manufacturers that still have inventories of raw materials bought before the Iran war.
But he said holding prices that long would not come without costs, as higher delivery expenses would still filter through the supply chain.
If cost pressures persist, Cua said manufacturers have three options—absorb part or all of the transport costs and defer price adjustments; shoulder added expenses to protect market share as competitors raise prices; or increase prices as necessary according to the rise in operating or delivery costs.
“The government can only request, influence and convince businesses to cooperate in the best interest of society and the economy,” he said.
Peso at weakest
Without a declaration of a state of calamity or emergency, the government has no authority to impose a price freeze on basic necessities and prime commodities.
Local manufacturers are also starting to feel the impact of the Middle East crisis and are calling on the government to roll out “mitigating measures” to protect domestic industries from a weakening peso.
The peso fell to a record low of P60.1 to the US dollar this week.
Federation of Philippine Industries chair Elizabeth Lee said that domestic-oriented industries would likely bear the brunt of the peso’s depreciation, with smaller companies particularly exposed to rising costs.
“Sustained cost pressures on import-dependent sectors could weigh on consumption and investment, albeit temporarily,” Lee said.
She said local manufacturers would be among the first to feel the effects of the peso’s decline due to higher fuel and raw material costs that could eventually be passed on to consumers.
Small- and medium-sized enterprises, Lee added, are particularly vulnerable because of their limited capacity to absorb currency swings.
Philexport upbeat
To cushion the impact on industry, she said the government should adopt calibrated monetary policy and ensure inflation expectations remain anchored.
The Philippine Exporters Confederation Inc. (Philexport), however, was more upbeat, saying some sectors could benefit from a weaker peso and a stronger dollar.
Philexport president Sergio Ortiz-Luis Jr. on Friday said a softer peso could help domestic producers, particularly in agriculture, by making imported goods less competitive.
Ortiz-Luis said overseas Filipino workers, whose remittances are largely denominated in US dollars, as well as workers in the tourism sector, could also benefit from the stronger greenback.
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