The suggested retail price (SRP) is a misnomer if the intention is to regulate the cost of goods and services.

Even an ordinary Juan dela Cruz will easily understand that the term SRP is a mere recommendatory price. Under the implementing rules and regulations of Republic Act No. 7581 (Price Act of 1992), the SRP serves as information and guidance of concerned trade, industry, and consumer sectors. So, a suggestion or a recommendation could either be followed or defied.

When the government issues SRPs for basic necessities, consumers mostly rely on the retailers’ conscience—whether they opt to keep their prices within the SRP or defy it, under threat of being issued a notice of violation by the Department of Trade and Industry.

SRP is much more different from price control and price ceiling under the Price Act of 1992. When price controls and price ceilings are violated, the State can take punitive measures. But price controls and ceilings can only be enforced under certain conditions.

Under Section 6 of the Price Act of 1992, price control on basic necessities shall be automatic, unless otherwise declared by the President, in an area under the following conditions: it was placed under a state of calamity, it was declared under an emergency, the privilege of the writ of habeas corpus is suspended in the area, it is placed under martial law, it is declared under state of rebellion, or it is in a state of war.

Under Section 7, the President, upon the recommendation of the implementing agency or the Price Coordinating Council, may also impose a price ceiling on any basic necessity or prime commodity if any of the following conditions warrants: the impendency, existence, or effects of a calamity; the threat, existence, or effect of an emergency; the prevalence or widespread acts of illegal price manipulation; the impendency, existence, or effect of any event that causes artificial and unreasonable increase in the price of the basic necessity or prime-commodity; and whenever the prevailing price of any basic necessity or prime commodity has risen to unreasonable levels.

Any person who violates Section 6 (automatic price control) or Section 7 (mandated price ceiling) of the Price Act of 1992 shall suffer the penalty of imprisonment for a period of not less than one year nor more than 10 years or a fine of not less than ₱5,000 nor more than ₱1,000,000, or both, at the discretion of the court.

We hope the government will find ways to address abnormal price movements of basic necessities without necessarily affecting the spirit of the law of supply and demand. While there is a need to address abnormal price movements, the basic principle of free enterprise should be observed.