1 February 2021 at 9:00 a.m. via Webex Cisco

Good morning to the Committee Chair, Senator Cynthia Villar, and the honorable members of this committee and the senate, Secretary William Dar, fellow workers in government as well as the other attendees. We would like to thank you for this opportunity to brief you on the increase in prices of food and Basic Necessities and Prime Commodities(or BNPCs),and what the DTI is doing to address these.

BNPCs under the Price Act

Pursuant to RA 7581 as amended by RA 10623, otherwise known as the Price Act, and under Section 3 Paragraph 3 of the said Act, the Department of Trade and Industry (DTI) and other implementing agencies such as the Departments of Agriculture (DA), Health (DOH), Environment and Natural Resources (DENR), and Energy (DOE) are mandated to ensure adequate supply and reasonable prices of their respective BNPCs at all times. To protect consumers, implementing agencies should ensure stability of prices and supply of their respective BNPCs, and prescribe measures against undue price increases during emergency situations and like occasions.

Each agency is mandated to conduct monitoring of prices to identify the cause of market price irregularities as well as determine price trends, to provide the basis for establishing Suggested Retail Prices (SRPs), and to develop a database system on prices.

Causes of Spike in Food Prices

It is important to consider the causes of spike in prices, given that the country’s inflation rate in December 2020 edged up to 3.5% primarily due to the increase in prices of food and non-food alcoholic beverages. Inflation for the food index climbed 4.9% in December 2020 from 4.5% in the previous month due to the upsurge in prices of vegetables, meat, fruits, and oils and fats because of the increased demand for meat and vegetables during the holidays.

Likewise, meat and pork inflation is being driven by the shortage of supply due to the African Swine Fever (or ASF), coupled by higher demand during the holiday season.

Proposed Solutions

The core problem is the issue on supply availability. Because of supply limitations on pork, the DA has presented their programs to address the situation. These include:(1)to repopulate the hog production in ASF-cleared areas; (2) to transfer hog supply from surplus provinces to deficit areas like Metro Manila; (3) to encourage diversification of diet to other protein sources like fish, chicken, legumes, and beans; and,(4) to import immediately the needed supply. To facilitate the importation of hogs, a temporary reduction in tariff rates and increase in MAV were recommended by the DA. The DA also proposed a temporary mandated price ceiling through an Executive Order to be issued by the President. We defer to the DA to explain these programs.

On the DTI’s part, we are strengthening Local Price Coordinating Councils (or LPCCs) to be able to enforce monitoring and compliance, and exact accountability of other stakeholders as to price compliance at the various stages of the supply chain. These include the market masters and administrators, retailers, and wholesalers.

The Joint Memorandum Circular No. 3 series of 2020 was issued where the role of LPCCs in Local Government Units (LGUs) under the jurisdiction of the Department of the Interior and Local Government (DILG) was strengthened to manage the unreasonable and excessive price increase of Basic Agriculture Commodities. Under this Circular, DA—together with DTI and the Metro Manila Mayors—strengthened Price Monitoring and SRP to assist in ensuring the price stabilization of agricultural products in their respective jurisdictions.

We also have the Sub Task Group on Economic Intelligence to study the pricing and layering of traders to pinpoint those who conduct illicit trading activities and act on it immediately. The information generated by the Sub Task Group will aid various agencies when they go on their monitoring and enforcement duties with regard to their respective BNPCs. With the help of the National Security Council (NSC),the National Bureau of Investigation (NBI)and the Philippine National Police (PNP), we will be able to look deeper into these illicit trading activities and apprehend abusive traders in the supply chain.

Likewise, we have programs like the Diskwento Caravan and the Bagsakan programs that bring basic necessities like fresh produce and processed foods that are priced in accordance with, or lower than the SRP, directly to the public. Furthermore, DTI’s e-Presyo app is our online system that serves as a price guide for basic necessities and commodities to give them value for money.

DTI is also actively pursuing new business models to improve consumers’ access to agricultural food products. For example, the DELIVERe project of the Sub Task Group on Food Value Chain is a digital logistics platform and technology previously used by the fast-moving consumer goods (FMCG) sector. This is now being applied in the delivery of fresh vegetables and other key food products direct to consumers, cutting the number of layers of traders from eight now down to just four touch points and reducing the transit time from five to seven days to just two days.

DTI—working in collaboration with the DA and other agencies and with the general public in a whole-of-society approach—remains committed in implementing the Price Act by ensuring adequate supply and reasonable prices of basic food commodities. This is also in keeping with DTI’s mandate as the primary champion of consumer rights.

But more than this, ensuring food security so that our people will have food on the table without putting a strain on their finances—especially during this pandemic—is in line with the President’s challenge that the government should be responsive to the needs of its people.

Thank you very much. ♦

Date of Release: 1 February 2021