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Supply disruptions to hike food prices in Philippines
Publication Date : 09-08-2012
The devastating monsoon rains that paralysed most of Luzon and parts of the Visayas in the Philippines this week are seen to cause a disruption in the supply of some agricultural products and, therefore, a temporary spike in food prices.
The Central Bank of the Philippines (Bangko Sentral ng Pilipinas or BSP) yesterday said the price of food, particularly products from areas affected by the rains, may likely increase at a faster rate because of temporary disruptions in the supply chain.
BSP governor Amando Tetangco Jr., however, sees the impact on food prices to be short-lived.
“The area affected by the rains is rather widespread—20 provinces in Luzon and the Visayas—but [according to an] initial assessment by the Department of Agriculture, portions of the damaged crops are recoverable, so what we have is not a situation of total loss,” said Tetangco.
The National Statistics Office yesterday reported that inflation averaged 3.2 per cent in July and 3.1 per cent in the first seven months of the year.
The Department of Trade and Industry (DTI) yesterday said that except for fish and vegetables, most basic goods may be seen to be stable in terms of supply and price despite concerns of overpricing by retailers and of “panic buying” by consumers.
According to Trade Secretary Gregory Domingo, supplies and prices of fish and vegetables traditionally become volatile in times of calamity because of sourcing and distribution difficulties.
However, he said that he had talked to the retailers and they said supplies and prices for other goods were generally stable.
He said the results of the DTI’s monitoring of prices in wet markets, groceries, supermarkets and other retail outlets amid concerns that consumers would be scrambling for supplies in reaction to weeks of rainy weather would be available by Thursday.
Philippine Association of Supermarkets Inc. president Carlos Cabochan said in an e-mail message that the industry group’s members are “here for the long haul” and do not raise prices overnight to take advantage of customers already having difficulty. Other groups could not be reached for comment as of press time.
According to the DTI’s latest weekly price monitoring chart (data as of August 3, published on August 6), retail prices for food and medicines were generally stable over the past week. Fuel prices increased, however.