DTI wants private sector to dictate prices of basic commodities

The Department of Trade and Industry (DTI) wants to deregulate how suggested retail prices (SRP) are fixed, thus giving the private sector a free hand in setting the prices sans government approval.

Trade Secretary Ramon M. Lopez told reporters he wanted prices to be determined through the natural course of competition, noting companies would still opt for affordable rates in order to preserve their market share.

Lopez said the DTI was already reviewing how this would come about, but noted that it would ultimately just “let the market decide.”

“There shouldn’t be any SRP approval from the DTI. Although it’s [provided] in the [Price Act] that the SRP should be set by the DTI, I think [it’s just] ministerial, to me, as long as the industry is very competitive,” he told reporters on the sidelines of a forum earlier this week.

SRPs serve as guide for consumers and manufacturers of prime and basic goods.

There are four implementing agencies of the Price Act: the DTI, Department of Agriculture, Department of Health, and the Department of Environment and Natural Resources.

In 1993, the agencies formulated Joint Administrative Order No. 1, which served as the implementing rules and regulations (IRR) of the Price Act.

The IRR provides that the “implementing agency may, whenever necessary, issue suggested retail prices.”

Through the years, SRP setting has become more of an imposition rather than a recommendation.

Lopez pacified fears that the proposal, if passed into law, would lead to prices of basic commodities to skyrocket.

“When there are many players and there is a good supply chain, the prices will be assured to be competitive,” he added.

He said the DTI proposal covered only industries that are already competitive, which means it must already have a lot of players in the field, among other factors. DTI would still step in if it sees any abusive market practices, he said.