Vigilance necessary

It’s that time of year when Filipinos start thinking about Christmas. September signals the onset of the so-called “ber” months, also a period when importers begin bringing in their goods to have sufficient stock for the Yuletide shopping peak.

Malacañang has called on government agencies, particularly the Departments of Trade and Industry and of Agriculture, to keep a tight watch on prices to prevent abuse and possible manipulation by crooked traders. The directive followed the findings of the Department of Justice that the recent spike in the prices of garlic and other prime commodities was deliberate. President Aquino also promised to keep tabs on the prices of essential items as he ordered all concerned agencies to monitor the supply and price situation in the runup to the yearend holidays.

Among food items, pork is expected to become more expensive as it is the main ingredient in processing ham, a regular item on holiday tables. The demand for chicken also peaks during the “ber” months. The prices of fruits likewise rise during this period.

Prices of basic goods and even utilities have actually been rising. As measured by the Consumer Price Index (CPI), the average increase in basic prices was 4.9 percent in August. This was the same rate in July. Again, power rates and food prices climbed in August. For perspective, the government is expecting inflation to average 3-5 percent this year, and the figure for the past two months is close to the high end of this range.

While headline inflation stayed flat in August, government data show that core inflation reached a 17-month high of 3.4 percent in that month. Analysts note that with core CPI inching higher, monetary authorities may be prompted to tighten money supply to contain inflation. Tight money supply, in turn, will lead to higher bank interest rates, including those charged on housing and other consumer loans. (Core inflation excludes components considered to be either volatile or susceptible to supply interruptions and typically consist of food and energy items. It takes out the effect of temporary disturbances and shocks—such as disturbances in agricultural food supply or movements in international oil prices—that cause prices to surge temporarily.)

A piece of consolation from Socioeconomic Planning Secretary Arsenio Balisacan, who is also director general of the National Economic and Development Authority, is that the government expects food supplies to improve in the coming months, in the process relieving pressure on prices to rise. “Food prices, while expected to remain elevated, are seen to normalize as the government steps up its rice importation,” Balisacan said, adding that the start of the harvest for the main corn season, which is expected to be completed by mid-September, would provide additional buffer to supply.

Still, he acknowledged that short-term intervention by the government would be necessary and should focus on ensuring efficient supply of prime commodities “given the potential upside pressures linked to possible increases in food and oil prices and pending petitions for adjustments in utility rates.”

In its vigilance to monitor prices and supply of basic goods, the government should encourage the public to report stores or traders suspected of hoarding or engaging in other unfair practices. A reward system—in which tipsters get prizes in cash or in kind—should lead to more active consumer participation in the price watch. Given the government’s lack of personnel, engaging the consumers themselves should be a big help.

A quick resolution to the truck ban in Manila is also in order. The daytime truck ban has been blamed for the rising prices of goods as cost of delivery increases (trucks have to use longer routes or faraway ports like Subic and Batangas or pay night differential wages when using Manila’s port at night) and delayed deliveries cause temporary supply shortages that, in turn, lead to price increases.

Most people wouldn’t mind an increase in the prices of nonessential goods such as toys and fashion accessories this Christmas, but for basic items such as food, medicine and clothing, the government should be vigilant in foiling unscrupulous traders. Ordinary Filipinos deserve to be protected from profiteers as the Christmas season approaches. They just have far too many problems to contend with today.