The Department of Trade and Industry (DTI) is in favor of allowing food and beverage manufacturers to import “1:1” or 50 percent of their sugar requirement and the other half from local producers.
DTI Secretary Alfredo E. Pascual emphasized in a radio interview that it is necessary that food and beverage firms are allowed to import sugar for their own use. Pascual, however, emphasized that this should on a “one is to one basis” or import one unit and one unit from local sources.
Pascual explained that the real solution to the reported shortage of sugar supply in the country is to ascertain the real demand or the country’s overall sugar requirement as he cited reports of hoarding and the ensuing raids in sugar warehouses.
A government task force though is studying the matter on the sugar issue, and for which the DTI Secretary does not want to preempt because sugar is actually under the jurisdiction of the Department of Agriculture.
He, however, said that DTI has been tapped to help in the price and supply monitoring of sugar in supermarkets that agreed to sell sugar at P70 per kilo.
Meantime, Pascual has told manufacturers to possibly implement cross subsidy in the pricing of processed goods and basic necessities.
Cross subsidy means passing on the supposed price increases on basic goods to the premium products, which are bought by the rich, in order to maintain the prices of the low end variant, which is normally patronized by the mass market. He said that each product has contribution to the overall profitability. To ensure that the low end variant are still affordable, they can be subsidized through the pricing in premium products.
“I am not saying they increase the prices of the premium products, just balance the distribution of cost variables to premium products to maintain the price of the mass market variant and still maintain overall profitability,” Pascual said.
On the request by the big bakers for increase in the prices of Pinoy Pandesal and Pinoy Tasty, Pascual said the request is still under review stressing that DTI has a formula whether a price adjustment can be justified or not.
The Philippine Baking Industry Group had petitioned DTI for price increase of Pinoy Tasty (loaf/450 grams) from P38.50 to P42.50 and Pinoy Pandesal (250 grams/10 piece per pack) from P23.50 to P27.50 due to higher cost of flour, sugar, fuel and other ingredients.
Pascual noted in the latest suggested retail price (SRP) bulletin, the DTI has allowed the increase in prices on 65 SKUs or shelf keeping units out of 180 SKUs listed as basic necessities and prime commodities.
The DTI did not include Pinoy Pandesal and Pinoy Tasty among the basic goods that were allowed to raise prices.
The DTI is also expected to issue another SRP bulletin for "Noche Buena" products come October or November.