Big bakers unanimously agreed to maintain prices of Pinoy Tasty and Pinoy Pandesal despite higher input costs as part of their commitment to mitigate inflationary pressures brought about by the pandemic disruption.
Johnlu Koa, president of industrial bakers - Philippine Baking Industry Group (PhilBaking), said they agreed to extend the price freeze on Pinoy Tasty and Pinoy Pandesal at P35 and P21.50, respectively, up to December 30 this year.
“This is one of our CSR (corporate social responsibility) projects which directly benefit the bread consuming public,” said Koa.
According to Koa, flour prices have been going up from P690 per 25 kilogram bag in June this year. He said that prices of flour by end of November this year are expected to go up to P995 per bag and P980 by middle of December this year. “So from June and now, the average increase is more than P200 already,” he said.
On top of flour, the main ingredient in bread making, other materials such as cooking oil, sugar, vegetable oil, and milk have also increased their prices by 5 to 10 percent already.
As a rule of thumb, for every P50 increase per bag of flour the price of Pinoy Tasty and Pinoy Pandesal should already be P3.50 or a 10 percent from the current price.
Despite these cost pressures, he said, the big bakers have decided to keep the current prices.
“Personally I believe that in order for us to be able to recover from this economic crisis all sectors of economy must join hands in chipping in to ensure that the retail market does not get damaged, damaged in the sense that it becomes unaffordable that we might create our own disruption in operations because if too expensive, nobody will buy,” he said.
As a result, the bakers said they are absorbing the increased cost as long as they can keep the marginal contribution or marginal profit.
However, Koa said that prices of their private brands or their premium brands will have to be adjusted by 3 to 5 percent to offset the 5- 10 percent increase in the cost of ingredients.
“The nice thing about the pandemic is the emergence of what we call economic compassion among businesses,” he said noting that businessmen have also their feet on the ground, noticing death and diseases that ravaged the country.
With that, he said, “Our (Philbaking) response was spontaneous, there was not much discussion but we just vote unanimously: no price increase.”
“As Philbaking, we just want to give an inspiration,” he said. He added that giving “ayuda” and providing vaccines are not enough forms of giving back for a “market that has taken good care of you for so many decades.”
“If you raise prices now, the guy will shit you. But when times are good, business is good, people have jobs, even a P20 increase there is no problem, but not now when everybody’s being pushed against the wall.”
Meanwhile, Atty. Victorio Mario Dimagiba, president of Laban Konsyumer Inc., commended PhilBaking for their decision. Dimagiba also cited Simplicio Umali Jr., president and general manager of the country’s largest bread manufacturer – Gardenia – have led the group in persuading to keep their hands tight on the continued success of Pinoy Tasty and Pinoy Pandesal.