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LKI Press Statement
August 24. , 2021
PRICE ACT MULLS GAS AND DIESEL AS BASIC NECESSITIES
Consumer advocacy group Laban Konsyumer Inc. (LKI) and its President Atty. Vic Dimagiba called for efforts to stabilize food prices as producers seek higher prices for their goods, citing “global supply chain disruptions of raw materials and higher shipping costs, which have allegedly increased import costs.”
The group stated that “From the consumer point of view, keeping prices at bay is the better option. It is important to verify the inventories of raw materials and finished goods. The parties should be transparent that there should be no stock inventory that can lead to windfall profits. Energy was cheaper last year. There should be offsetting of costs.”
Dimagiba expressed that “The current proposed amendments of the Price Act being deliberated in Congress will play a crucial role in ensuring reasonable prices of basic necessity and prime commodity during and beyond the pandemic.”
LKI detailed that among the contentious proposals which were submitted by the stakeholders in the recent Technical Working Group of the Committee on Trade and Industry of the House and which was chaired by Congresswoman Ria Vergara were the following:
- The inclusion of gasoline and diesel in the items under Basic Necessities in addition to kerosene and household LPG where prices are frozen for a period of fifteen (15 ) days from the declaration of an emergency . The proposal was first made by Laban Konsyumer Inc. and surprisingly was supported by the Department of Energy.
The oil industry through the Petroleum Institute of the Philippines opposed the inclusion of diesel and gasoline as Basic necessities subject to price freeze and raised a veiled threat of supply shortages during the period of calamity and pandemic.
- The definition of prevailing price shall mean the average price at which any basic necessity has been sold in a given time within the month from the occurrence of any of the conditions as proposed by the Philippine Chamber of Food Manufacturers,
Inc. in cases of price freeze.
- The European Chamber of Commerce of the Philippines recommended to limit the definition of prime commodities to cover goods vital to the needs of the consumers for daily sustenance and existence but should not include commodities to discretionary goods as there are variants within the product categories as in personal protective equipment, medical devices and select health care products.
- The Cement Manufacturers Association of the Philippines took a very extreme recommendation against the Bill and opposed the imposition of price freeze to include prime commodities such as construction materials especially cement and opposed all provisions in the Bill that include cement as either a Basic or Prime good, nor the inclusion of cement in any price freeze and price ceiling authorized under the Price Act.
- The definition of Suggested Retail Price elicited varied opinions from the stakeholders. They are as follows :
- The Bill defines SRP as the price issued by the concerned agency to be used as reference in the monitoring of prices.
- The Food Chamber and the European Chamber proposed that SRP refers to the recommended price issued by the manufacturers and producers to be used as reference in the monitoring of prices.
- The European Chamber added that the proposal shall ensure the rights of the manufacturers to adjust prices based on market forces will be upheld.
- The Philippine Consumer Centric Traders Association Inc. Is of the opinion that SRP for basic necessity and prime commodities are unfair to Small and Medium Retail Enterprises .There should be a mechanism to set margins for small retailers versus the manufacturers SRPs.
- The Philippine Retailers Association proposed to maintain the present provision of the Price Act.
In my opinion, a manufacturers or distributors SRPs may be a form of price fixing with the retailers and should be studied in the light of the much later law, the Competition Act.
- The National Price Coordinating Council should be given the power to include or exclude Basic necessity or Prime Commodity under the coverage of the Price Act, as well as impose price ceiling , and there is no need to seek the President’s approval .
- The Food Chamber proposed that if any basic necessity is found to be monitored at prices higher by 10% of the latest SRP, price ceiling may be imposed on the basic good.
- On the recommendation of Laban Konsyumer Inc., a special SRP may be issued on basic necessities and prime commodities during special seasons like school opening for school supplies and Noche Buena products during the Yuletide season.
- The Food Chamber proposed that the National Price Coordinating Council should develop standards and guidelines on reasonable pricing that will serve as a guide to assist manufacturers and producers in setting their products SRPs.
- Penalties for illegal acts of price manipulation shall increase to minimum Php 100,000.00 in times of emergencies.
Dimagiba concluded that “This Congress has one more session to complete the amendments to the Price Act and attune the law to the needs of the current crisis and beyond . In the past thirty ( 30 ) years , the Price Act balances the interests of the consumers as well as of business. This is the best opportunity to strengthen the Price Act to ensure continuing access to reasonable prices of basic and prime goods and assuring fair return to business .”