Business

Another inflation spike? Biz leaders allay ‘undue concerns’

MANILA – The leaders of three influential business organizations said forecasts of a renewed inflation spike in August and succeeding months are largely unfounded, and can only cause undue public concern.

Fernando Martinez, chairman of the Independent Philippine Petroleum Companies Association (IPPCA), said the current pump price of diesel, which hovers around P61 to 62 per liter, is still a long way from the peak of P75 per liter average around June last year.

He said any uptick in inflation will likely be modest and nothing close to the inflation surge experienced by consumers from December 2022 to February this year.

Since then, the country has seen five continuous months of declining inflation.

Martinez, also an official of the Philippine Chamber of Agriculture and Food, Inc. (PCAFI), urged the government to establish more Kadiwa stores nationwide to offer financially struggling Filipinos food at subsidized prices.

“Kadiwa (stores) can definitely help mitigate food inflation. As for petroleum or LPG (liquefied petroleum gas) in particular, the government can probably help absorb swings in international prices by allowing small refillers to cut down on their operations costs. They should revisit safety rules imposed by the DOE (Department of Energy) and requirements of local governments for issuing business permits (on small LPG retailers),” he noted.

Gregorio San Diego, chairman of the United Broiler Raisers Association (UBRA), said he is perplexed at forecasts of higher inflation, considering farm gate prices of chicken have gone down to around PHP98 per kilo in August from over P120 per kilo the previous month.

He said that while retailers are probably not keen on rolling back prices from their current levels of around P200 per kilo, there is certainly no reason to increase the price of dressed chicken today.

San Diego added that unmitigated importation of chicken parts means there is always an oversupply of the commodity, to the detriment of the local poultry industry.

“UBRA (members) just met today (Wednesday) and it was reported that another 16 million kilos (of dressed chicken) were imported recently. This is bringing farm gate prices down too low… our members are losing money. There is no justification to raise retail prices (of chicken),” he emphasized.

, Steve Cua, president of the Philippine Amalgamated Supermarkets Association (PAGASA), said that food inflation is likely being led by rice, which prices have spiked by up to PHP10 per kilo in recent days.

However, he noted that certain food items actually reduced prices this month.

“The rollbacks in certain products had little to do with economic factors… and are probably the result of promotional or competitive considerations,” he added.

Cua called on policymakers to “think medium-term” by supporting local food producers and not getting complacent with the ready availability of imports.

PAGASA’s president said that domestic agricultural productivity is the key to stable food prices.