Manufacturers of basic goods and commodities remain reluctant to lower commodity prices despite declining crude oil prices that have led to lower domestic trucking costs, the Trade department said.
Following a meeting of the National Price Coordinating Council (NPCC) on Friday, Trade Secretary Adrian Cristobal and Undersecretary Victorio Mario Dimagiba told reporters that the department would be talking to associations of goods manufacturers and producers—from poultry, crops, and dairy to meat processors and sardine canners—in an effort to reduce suggested retail prices (SRPs).
Cristobal said the meetings, to be held over a two-week period, would start this week.
The objective is to negotiate with goods manufacturers and producers to slash SRPs considering that lower crude oil prices, which have led to cheaper fuel, have pulled down trucking costs.
Pepito Dino, president of the Confederation of Truckers Association of the Philippines, said trucking accounts for 35 percent to 40 percent of overall costs of manufacturers and producers.
Dino told the NPCC meeting that trucking costs in Metro Manila had already gone down to P16,000 for a 20-foot container from P20,000 to P24,000 last year.
“The associations [of goods manufacturers and producers]are careful in their projections of cost … There might be a case of colluding in price setting. So it’s hard to give exact figures. That’s why we’re having one on one meetings with industries and the truckers regarding their pricing,” Cristobal said.
Last week, the DTI and the NPCC released a matrix of slashed SRPs of basic goods and commodities.
During the NPCC meeting, manufacturers and producers expressed reluctance to reduce prices, citing other manufacturing costs.
“The groups said we need to talk it out because they have other costs, not only trucking costs,” Dimagiba said.
“[M]anufacturers and producers are not ready to hear from the truckers association that trucking costs have once again decreased this year,” he added.
Based on Energy department data, fuel prices significantly dropped in 2015, by 25.81 percent for diesel, 13.12 percent for fuel oil, and 4.27 percent for household liquefied petroleum gas (LPG).
An assessment of by the Trade department’s Consumer Protection Group found that lower fuel prices would correspond to a reduction in SRPs of basic and prime goods by 0.05% to 3.04% or P0.01 to P26.46.
This would mean that the price of canned sardines could go down by P0.14 per can, evaporated milk by P0.29 per can, condensed milk by P0.40 per can, powdered milk by P0.38 per pack, coffee refills by P0.31 per pack, instant noodles by P0.08 per pack, corned beef by P0.26 per can, flour by P26.46 per bag and cement by P1.48 per bag.
Dimagiba said the series of meetings would allow the Trade department and manufacturers to recompute prices in accordance with prevailing costs.