As the chair of the National Price Coordinating Council (NPCC), the DTI is closely monitoring the implementation of the TRAIN law as it impacts the prices of products that the Filipino consumers daily.
The DTI evaluated the possible impact of the new tax rates on the prices of basic necessities and prime commodities (BNPC).
Based on the computation of the Consumer Protection and Advocacy Bureau (CPAB), the impact of excise tax on the SRP of BNPC will range from a very minimal price increase of Php 0.04 to Php 1.85. (Please refer to the attached matrix.)
Republic Act 7581 or the Price Act, as amended, specifies that the basic necessities under the DTI’s jurisdiction are canned sardines, evaporated and condensed milk, coffee refill, laundry bar, detergent powder, candle, bread (Pinoy Tasty and Pinoy pandesal), salt, bottled water, and instant noodles.
The Price Act also specifies that the prime commodities under the DTI’s jurisdiction are flour, canned corned beef and meat loaf, vinegar, patis, soy sauce, toilet soap, paper, school supplies, cement, clinker, GI sheets, hollow blocks, construction supplies, batteries, electrical supplies, light bulb, and steel wires.
The excise tax on diesel has direct impact on distribution costs which is generally 5% of the cost component. According to Secretary Ramon M. Lopez, “The impact of excise tax on the prices of BNPC is very minimal which manufacturers will opt to absorb. Thus, DTI sees no price increase in the BNPC”. Furthermore, there should be no price increase at the moment as establishments should still be disposing their current inventory. DTI will continuously monitor the price stability of market products in the coming weeks”, Secretary Lopez asserted.
However, Secretary Lopez underscores that the establishments’ replenishment of new stocks is not a ticket for them to increase the prices of basic and prime goods.
Fuel and sweetened beverages will be the most evident to show price movement because of the direct impact of the TRAIN law. For 2018, diesel will be taxed at Php2.50 per liter same with fuel oil. For LPG, it will be taxed at Php1.00 per kilogram, and Php50.00 for coal per MT.
Meanwhile, sweetened beverages which uses caloric or non-caloric sweeteners will be taxed Php6.00 per liter, while Php12.00 per liter for those that contain high fructose corn syrup (HFCS).
All milk products, 100% natural fruit and vegetable juices, meal replacement and medically indicated beverages as well as instant coffee are exempted from this excise tax on sugar.
DTI intensifies its monitoring activities nationwide
The DTI, through its Fair Trade Enforcement Bureau (FTEB), has intensified its monitoring activities in the National Capital Region (NCR) to ensure that prices of basic goods are still within the Suggested Retail
Price (SRP) and to prevent acts of profiteering.
The monitoring teams of DTI Regional and Provincial Offices have likewise strengthened their price monitoring activities in their respective areas. DTI reminds retailers and distributors that according to the Price Act, those who will be committing any illegal act of price manipulation, specifically profiteering, shall be imposed an administrative fine of up to One Million Pesos (Php 1 ,000,000.00)
and/or criminal penalties of an imprisonment of not less than five (5) years nor more than fifteen (15) years and fine of Five Thousand Pesos (Php 5,000.00) to Two Million Pesos (Php 2, 000,00.00).
Secretary Lopez reiterates, “The Department calls on manufacturers and retailers to support the government’s TRAIN Act and assist the consumers”. The DTI vows to closely monitor movement
of prices of basic and prime goods and their raw materials to ensure that consumers will continue to enjoy reasonably-priced goods in the market in light of the new tax reform law. The Department also encourages the consuming public to report any incident of profiteering by calling DTI Direct at 751.3330 or send a text message to 0917.8343330.
**
