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Hands off

By: Dr. Ramon Ricardo A. Roque, CESOI, Diplomate

Whose interests will be served when the Department of Trade and Industry (DTI) adopts a hands-off policy on the setting and approval of Suggested Retail Price (SRP) of prime commodities?

The proposed DTI policy is said to “allow market forces to determine movement in supply and demand of commodities where players can compete with each other and have the freedom to seek reasonable profits.”

Let us make one thing clear – the SRP scheme was put in place to protect consumers from unreasonably priced prime commodities. Such “unreasonable” prices will obviously happen when market players, particularly the manufacturers and/or traders connive with each other to manipulate the effects of market forces so that they can earn more profits.

Even if one can argue that freeing market forces can benefit consumers, the issue here is not about free or controlled market forces but the protection of consumers from market manipulation.

Can DTI ascertain that the market forces will freely operate when it adopts its hands-off policy on SRP? Will the policy protect consumers from market manipulation by manufacturers and/or traders? Will the policy not serve as an “invitation” for market manipulation?

DTI is arguing that it is not abandoning its mandate to protect consumers as its proposed policy comes with a provision that manufacturers need to give a 30-day advance notice to allow the agency to “do its calculations and fishbone analysis to determine if there are extraordinary movements that would require the manufacturing sector to explain or justify.”

Does this mean that it will up to the DTI to decide whether the explanation or justification of the manufacturing sector is “acceptable” or not? What will DTI do to the SRP set by manufacturers when it finds the explanation or justification unacceptable?

One thing is clear – DTI needs to clearly define such “hands-off policy.” Why will it need to decide on the actions of the manufacturing sector when it wants its hands off the SRP? Why say that it is taking its hands off from the setting and approval of the SRP when it could (as it should) change the manufacturers’ decisions for the sake of consumer protection?

At the end of the day, the adoption of such policy and other similar policies (including changing existing policies) should be anchored on DTI’s fundamental responsibility of serving the interests of the Filipino people. The same should be clear in its actions and decisions.