By Revin Mikhael D. Ochave, Reporter
LOCAL RETAILERS and supermarkets are worried over the peso’s continued weakness against the US dollar, which is driving up prices of imported products.
Steven T. Cua, Philippine Amalgamated Supermarkets Association president, said prices of some imported products have increased significantly as a result of the peso’s depreciation against the US dollar.
“Products which are totally imported, components of which are partially imported or where the majority of contents come from outside the country, have long increased their prices heftily. We are looking at a minimum increase of 10% to an exceptional high of 40% for food products,” Mr. Cua said in a separate Viber message.
“The reasons would be the rise in cost of production by foreign manufacturers, lack of raw materials on the production side, increasing transportation/logistical costs, difficulties with customs duties, unstable demand by customers and now, the weakening of the peso versus the US dollar,” he added.
The local currency hit a record low on Sept. 8, closing at P57.18 against the greenback.
On Monday, the peso closed at P56.86 per dollar. Year to date, the peso has weakened by 11.49% or P5.86 from its P51-per-dollar close on Dec. 31, 2021.
Philippine Retailers Association (PRA) President Rosemarie B. Ong told BusinessWorld in a Viber message that the peso depreciation is “disturbing.”
“It will have a big impact on the purchasing power (of Filipino consumers). With the rising prices and depreciation of peso, retailers will experience headwinds. Being an importing country, it will be difficult to just pass on the cost,” Ms. Ong said.
Many retailers are reluctant to implement price increases, especially considering consumers are already hurting amid elevated inflation.
“We don’t do across-the-board increase. We have to consider the consumers’ diminishing wallet size. The decision will really depend on the arrival time of the goods,” Ms. Ong said.
According to Mr. Cua, some of the imported products sold in supermarkets that have increased prices include luncheon meat and condiments.
“There are price increases for American luncheon meat, all items that are repacked, re-canned, rebottled for imported beans, legumes, juices, cherries, mushroom, squid, cuttlefish, salt, snacks, coffee, juices, condiments, instant noodles, pasta mixes, soda, pasta, and frozen meats,” Mr. Cua said.
“Though the weakening of the peso is worrisome and alarming, it is relative to how our economy is performing. Things may get better if the government moves decisively,” he added.
Mr. Cua noted that importers and manufacturers are increasing prices on a staggered basis.
“Importers and manufacturers stagger their desired price increases and do it through a series of timed installments. However, the critical shopper would notice the series of increases on the same item,” he said.
Meanwhile, PRA’s Ms. Ong said that the industry group still expects growth for the retail sector this year despite the impact of the peso depreciation.
“We have not adjusted our projections. We are hopeful that with the holiday months, people will still spend,” she said.
