THE Marcos Jr. administration recently established a Private Sector Advisory Council (PSAC) which would regularly provide the President with what is actually happening in the grassroots and make policy recommendations to him. Sabin Aboitiz, president and chief executive officer of Aboitiz Equity Ventures, was picked by the President to head the PSAC.
The other members of PSAC are Aileen Uygongco-Ongkauko, president of La Filipina Uy Gongco Corp.; Joey Concepcion, Go Negosyo founder; Henry Aguda, Union Bank chief technology and operations officer; and Paolo Borromeo of Ayala Healthcare.
There is nothing new or special about the PSAC. It has been a common practice in other parts of the world for a PSAC to be formed. In other jurisdictions, such as various US states, a PSAC is established through state legislation and is part of the permanent special advisory committees of the executive branch. Even the United Nations Development Program recommends the formation of PSACs for big-ticket projects for developing countries.
Escalating food prices
According to news reports, among the instructions left by the President to the Department of Agriculture is "to increase the production of rice and corn, and guarantee the stability of the supply of pork and chicken."
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How can the stability of the supply of food products, including pork and chicken, be guaranteed? There is no easy answer, as there are a lot of factors that would go into the equation of supply stability. This was one of the major topics that we discussed during our "Diretsahang Pananaw" Media Forum on Wednesday, July 13. We were lucky to have Mr. Steven Cua as our resource person that day.
Cua has been the president of the Philippine Amalgamated Supermarkets Association since 1999. The association acts as "the voice of the food retail industry to government, suppliers, media and the buying public." Cua's family owns Welcome Supermart Inc.
He is no stranger to public affairs. He went to work at the National Housing Authority right after graduating from the Ateneo de Manila University. He is a member of the National Price Coordinating Council, sitting as the representative of the food retailing/supermarket sector, and he is also an incumbent elected councilman of Barangay Lourdes in Quezon City.
According to Cua, the government's suggested retail price (or SRP as it is more commonly known to consumers) on selected prime commodities is a short-term solution and would eventually hurt the retail industry if mandated to be followed for a long time. There are long-term solutions, and these should be looked into by the government. He pointed out that foreign supermarkets and retailers did not survive in the Philippines because of this SRP.
The African swine fever and transport movement restrictions during the Covid-19 pandemic are the main contributory factors to the pork and chicken shortage in Metro Manila. Cua claimed that the most affected by the ASF and hauling woes were the backyard hog raisers, not the big corporate hog farms, and a substantial portion of our pork meat supplies come from these backyard hog raisers. Cua also cited the decadeslong ban of pork products in Spain and how they were able to survive such a debacle.
Asked if the supermarkets and other retailers can bring down the prices of basic commodities, Cua replied in the negative. The prices of these products are dependent on the manufacturers and middleman distributors, not the retail stores. If the retail stores would continue to follow the government's SRP, then their profit margins would continue to shrink until they can no longer operate their stores. He illustrated this with a supply chain-logistics explanation, which is not as simple as going from point A to point B.
He argued that supermarkets and groceries should be allowed to play with their own pricing strategies to enable the Philippine retail industry to grow. This is a good thing to hear from a citizen like Cua, who is not a private citizen since he is a councilman. Government officials would always insist on price controls, which are mostly found to be economically unsound.
Cua advocates that Filipino consumers should do away with the "imported products" mentality. Instead of buying the more expensive imported goods, consumers should patronize their local counterparts, which might even be more delicious and cost less.
In order for our economy to improve and grow, we must all buy locally made products instead of importing, yet there is one high government official who recently insisted on importing food products instead of developing our local agriculture.
Could the PSAC make appropriate, doable and workable solutions for the turnaround of our battered economy? Hopefully so. If I were the President, I would include Steven Cua in the PSAC.
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