FILIPINO consumers will have no choice but to bite the bullet as prices of certain food items may continue to increase due to the weakening peso.
Agriculture Undersecretary Fermin D. Adriano said our imported food products would become “more expensive” due to peso depreciation. And since we are importing a lot of food products, it would be quite “painful” to Filipino consumers, Adriano added.
The local currency breached the P54 to a dollar territory on Monday, hitting its weakest level in about four years. The peso closed at P54.265 against the greenback on Tuesday from P54.065 last Monday.
Adriano said importing food products is a “painful” but “necessary” decision for the government to temper domestic prices due to local supply shortages.
“It is really painful. It means we will pay higher prices. But we have to [do it] to temper local prices because we have supply shortages,” he said in an interview on Tuesday.
Adriano listed the commodities that the country has no choice but to depend on foreign suppliers for, in order to boost its domestic stocks: sugar, corn, captured fisheries, feed wheat, and pork.
Adriano noted that local pork prices remain elevated in the vicinity of P400 per kilogram while sugar prices have soared past P80 per kilogram.
Some industry leaders have also noted that raw materials for livestock and poultry production as well as for the flour industry would become more expensive due to the continuous depreciation of the peso.
“We will be paying more pesos for every ton of wheat we import. Add to that the rising freight costs,” explained Ric Pinca, Executive Director of the Philippine Association of Flour Millers Inc.
“Imported feed raw materials will be more costly. So will breeders and hatching eggs,” according to Elias Jose Inciong, President of the United Broiler Raisers Association.
The country’s key agricultural imports in the first quarter were wheat at $136.57 million, dairy products at $124.87 million, rice at $113.92 million, fruits and vegetables at $91.92 million, urea at $11.95 million, and fertilizer excluding urea at $36 million, among others, based on Philippine Statistics Authority (PSA) data.
Last year, the country’s top agricultural imports were cereals ($3.147 billion), residues and waste from the food industries; prepared animal fodder ($1.885 billion), miscellaneous edible preparations ($1.764 billion), meat and edible meat offal ($1.694 billion) and animal or vegetable fats and oils ($1.526 billion), PSA data showed.
Last month, experts interviewed by the BusinessMirror pointed out that a weaker peso will benefit the country’s agricultural exports but will be a bane to Filipino consumers as prices of imported food items increase. (Related story: https://businessmirror.com.ph/2022/05/10/weak-peso-deals-agri-double-edged-result/)
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