Despite concerns of immediate price increases because of the TRAIN law, most basic goods and commodities did not see any jump in prices in the first 10 days of the year, according to the latest monitoring done by the Department of Trade and Industry (DTI).
Trade Secretary Ramon Lopez said that a quarter of the items monitored were even sold in some grocery stores below the suggested retail prices (SRP). In total, there were 106 items covered, 81 of which did not have higher prices, he said.
This followed concerns that the effectivity last Jan. 1 of the TRAIN law, which includes higher excise taxes on fuel, would substantially affect the prices of basic goods and commodities.
The DTI had previously tried to disprove this, noting that the increase due to the fuel tax would only affect the distribution cost, an effect so small that manufacturers should just absorb it. Nevertheless, consumer concerns on prices still persisted.
“We continued the price monitoring especially given the recent complaints or fears being projected on the supposed impact of the tax reform law. We dispelled the rumor, the fear being created. The prices are really stable,” Lopez said.
The TRAIN law was enacted late last year. It lowered the personal income tax of many Filipinos but increased consumption taxes on cars, coal, fuel and sweetened beverages, among others.
Upon making the necessary computations, DTI officials said that apart from directly affected commodities such as cars and sweetened beverages, the effect on other goods should be minimal because the excise taxes would only have a small impact on the distribution costs of companies, the latter accounting for less than 5 percent of the overall production cost, Lopez said in an earlier interview.
Nevertheless, because of a DTI policy that allowed manufacturers the freedom to set the SRPs, the increase could be bigger. In such case, Lopez said the price increase should be “justifiable.”
These comments, which echoed DTI’s statement earlier this year, still were not enough to pacify some stakeholders. In a statement on Monday, The Associated Labor Unions-Trade Union Congress of the Philippines criticized Lopez for “giving vain lip service” against profiteering.