RETAILERS and supermarket owners said they support a move by leading manufacturers to voluntarily keep prices steady, noting the “relief” such a measure would provide to the public.
Steven T. Cua, executive director of the Philippine Amalgamated Supermarkets Association, said that he welcomes the voluntary price freeze initiated by the Department of Trade and Industry (DTI) and carried out by eight major food manufacturers.
“DTI has chosen to monitor selected food items from producers who are considered market leaders. As such, most other manufacturers would position the prices of their products versus those coming from market leaders,” Mr. Cua told BusinessWorld.
“When market leaders keep their prices steady, competitors in the same product category normally follow suit. Of course, there will always be some who will bravely apply the red ocean strategy (making a move to expand share in a crowded market) or are forced to adjust prices due to their circumstances,” he added.
He said that although the temporary price freeze is meant to provide relief, it may also mean more sales as consumers gain purchasing power.
Roberto S. Claudio, president of the Philippine Retailers Association, said that the voluntary price freeze is “a better alternative to any price control measures previously implemented.”
He cited the example of price controls on school supplies during the back-to-school season and on basic commodities priced at below the cost of production resulting in shortages.
Mr. Claudio said the PRA will further encourage other manufacturers to support the price freeze as long as possible.
On June 1, the DTI announced that eight major manufacturers had committed to a voluntary price freeze to mitigate the effects of rising prices and El Niño.
The DTI said Monde Nissin Corp., Alaska Milk Corp., Nestlé, NutriAsia, Inc., and San Miguel Foods are participating in the initiative, which brought the total number of stock-keeping units where prices have been frozen to 31.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the voluntary price freeze will help in mitigating inflationary pressures.
“Nothing really new; they do this from time to time to help. The price freeze could have been prompted by increased competition with local and even foreign/imported alternatives,” Mr. Ricafort said.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the voluntary price freeze is “a welcome example of good corporate citizenship that will help many consumers cope with inflation.”
He added that since it is only temporary in nature, the volunteers are signaling that they can manage any impact on their profitability.
“Meanwhile, the government and private sector have to continue working together for long-term solutions to increase productivity, improve supply chain efficiency, and ensure price stability,” he added.
The consumer price index rose 3.9% in May, the fastest rise since November 2023, according to the Philippine Statistics Authority’s report.
This was also higher than the 3.8% in April and brought the five-month average to 3.5%. — Justine Irish D. Tabile