CONSUMER Welfare Month is about to end but, aside from government pronouncements to control prices of goods, there is no assurance consumers’ welfare is a priority in these challenging times.
The purchasing power of consumers has been eroded by higher inflation rates and many other factors. The root causes to this erosion need to be addressed if we are to truly pay “national attention to the role consumers play in the vitality of the economy,” as stated in Proclamation number 1098 that dedicated this month to the welfare of consumers.
The Department of Trade and Industry (DTI) held a forum last Friday, Oct. 26, to mark the month but, basing on the reported highlight of the presentation, it was about how consumers are encouraged to buy their Christmas goodies now or before prices spike.
DTI 7 Director Asteria Caberte said in the Consumer Forum that price ceilings on highly perishable goods are being imposed in the country for the first time to mitigate the higher inflation rates. She said the Tax Reform for Acceleration and Inclusion (Train) law had “a minimal contribution” to inflation, although business leaders clamored for a stop to higher taxes under Train to prevent more price increases.
Caberte said the other factors to inflation are insufficient rice supply in the market, higher prices of oil globally, and the weakening of the peso due to the increase in United States interest rates and balance of payment deficits.
What the consumer sees are not the cost of fuel in the global market or the rising US interest rates but the family grocery budget getting tighter or the monthly transportation costs growing.
Take, for example, Caberte’s advice to consumers. Buy your Noche Buena food items for Christmas this early before prices spike. But buying ham and cheese and whatever ingredients for the holiday dinner is not within the periphery of immediate purchases for ordinary consumers. Those purchases are better made after Christmas or yearend bonuses are released.
Caberte suggested retail prices for Noche Buena products are being set by the DTI to allow consumers to plan their holiday purchases. She also said producers and manufacturers of basic necessities and prime commodities have promised to hold off any price increase up to the end of 2018, amid the high inflation rate. Prices of basic commodities in Central Visayas rose to seven percent in September from 6.3 percent in August.
Protecting the welfare of consumers goes beyond setting price ceilings. It involves policy review on what worked and what did not. Consumer Welfare Month should be about addressing errors in economic planning and governance, not the temporary measures of price freezes.
The best way for government to assure consumers that their welfare is a priority is for it to announce a stop to the second round of higher excise tax on fuel under the Train law that is originally set to take effect on Jan. 1, 2019.
October 27, 2018
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