A private think tank on Saturday warned against the Trade department’s plans to remove the suggested retail price (SRP) of basic commodities, a move that it said would give traders a free rein in determining prices to the disadvantage of consumers particularly the poor.
“Instead of encouraging competition, however, price deregulation is wont to push prices upward,” said Ibon Foundation in a statement.
“This is a form of deregulation whereby the government reneges on its responsibility to regulate the price of basic goods and protect consumers,” the group added.
On Thursday, Trade Secretary Ramon Lopez said his department would discontinue the retail price setting scheme in an attempt “to allow market forces to determine the appropriate cost of consumer products including food” and supposedly encourage competition so that firms are compelled to lower their rates to the advantage of consumers.
Ibon warned that if the same form of deregulation happens to basic goods, the DTI directive “will be detrimental to many poor Filipinos, of whom, based on official data, 21.9 million in extreme poverty live on or below P61 per day and 65 million live on only P125 or less per day.”
The group cited as an example deregulated industries such as electricity and power, wherein few players in power generation, production and distribution are able to dictate the rates.
“Competition presumes a large number of producers—and not just a handful, or a monopoly—competing in terms of price and quality to provide consumers’ needs.”
The economic think tank likewise raised concerns over the intention of the DTI directive, as the profit-seeking nature of the private sector contradicts the State’s duty to protect consumers in terms of ensuring the affordability of basic goods.
The group likewise called on the government to uphold its regulatory function and ensure people’s access to basic goods in accordance with the Price Act, which states that “it is the policy of the State to ensure the availability of basic necessities and prime commodities at reasonable prices at all times” and to protect consumers from various sales malpractices, such as price manipulation.
Removing SRPs will also run contrary to the 1987 Constitution and Republic Act 7394 or the Consumer Act of the Philippines which guarantee related consumer rights stating that “The State shall protect consumers from trade malpractices…” and that the State shall ”protect the interests of the consumer, promote his general welfare and likewise establish fair standards of conduct for business and industry,” respectively.