Bakers expect the Department of Trade and Industry (DTI) to grant their petition for a 10 percent increase for Pinoy Tasty and 17 percent hike for Pinoy Pandesal to cover increases in flour prices alone as the industry prepares for a rebound starting next year after three consecutive years of decline.

Simplico Umali Jr., president and general manager of the country’s largest bread maker Gardenia Bakeries Philippines, said manufacturers have petitioned for a price increase of Pinoy Pandesal from the prevailing P23.50 to P27.50 (25 grams/10 piece pack) and Pinoy Tasty (loaf/450 grams) from P38.50 to P42.50, just to cover for increases in flour prices alone. The price hike rate still excludes the hikes in prices of other bread ingredients and cost components, such as sugar, oil, and fuel.

“The DTI has not yet approved our appeal for a small price increase just to allow us to break even. They’re still studying it,” said Umali stating they will be meeting this week.

Umali said this as the industry is expected to continue in the negative territory this year. The bread market is seen to decline by five percent this year, deeper from the three percent last year. The bread market has shrunk by five percent in 2020 and three percent in 2021, and maybe another 5 percent this year.

“We’re selling already at a loss,” he said. Since Pinoy Tasty and Pinoy Pandesal production is a corporate social responsibility program of the big bakers and the flour millers, producers only earn at break even. This time, Umali said they are practically subsidizing the two products, which now account for 20 percent of the mass market.

He said that some bakeries, one branded, had sold to another company to recover their investment. A few others and some community bakers have either closed or sold to new entrepreneurs as the lockdown and difficulty to source supply during the two-year pandemic have made it impossible for their business to thrive.

“Actually, there were bakeries that already closed down. One big baker had sold their company to another company, there's been a change of ownership,” he said.

“Hopefully these bakers will start reviving their stores because the public is beginning to start buying bread once again,” he added noting that while some have closed operations, there are also others that are trying to fill the void.

Umali even hinted for potential rebound in the next two years. He forecasted the industry to grow eight percent in 2023 and 11 percent in 2024.