Exec: Price hike only on new stocks of basic goods

THE REGIONAL office of the Department of Trade and Industry (DTI) is expecting adjustments in prices of commodities as a result of the implementation of the new tax law if the stocks are new .

 DTI XI regional director Maria Belenda Q. Ambi told the TIMES yesterday in a text message that while the new tax law has taken effect, businesses are advised to only jack up prices once their old stocks have been disposed of.

 The enterprises, she said, would be subject to show cause order if they have already increased the prices for old stocks. She said her agency has not detected any movement in prices of basic commodities, goods that consumers buy for their homes.

 Under the Tax Reform for Acceleration and Inclusion (TRAIN), tax increases would be imposed on products such as fuel, sweetened beverages, cigarettes and cars. The tax hikes would also cause price increases.

 The Philippine News Agency reported that an excise tax of P2.50 per liter would be imposed on diesel fuel and P7 a liter for regular and unleaded premium gasoline. The caloric and non-caloric sweeteners would have a tax of P6 per liter.

 Edwin O. Banquerigo, director of DTI-Davao City Field Office, told the TIMES in a phone interview that the new tax law would only have a minimal effect on basic and prime commodities as that would be affected on the hike of excise tax on fuel and gasoline products.

 The transportation cost, he said, is part of the production cost of the goods.

 “While the Train law is now effective, the effect on basic necessities and prime commodities should be minimal since fuel and transport cost account for less than five percent of the production cost. Expected net effect on prices of basic necessities and prime commodities is around 0.4%,” Banquerigo said.

 The impact of the new tax law, he said, is expected to take effect in two to three weeks as the gas stations still have old inventory.

 “Also, most goods on sale are still old inventories. Should there be violators, they can be charged for profiteering, which carries penalty of P20,000 to P1 million depending on the size of the establishment,” Banquerigo said.

 The DTI-Davao City Field Office, he said, also received concerns from the consumers that there are already price increases on sweetened beverages like soft drinks and juices.

 Banquerigo said they would look into the establishments to verify if they have imposed such increases. “They have to prove that the products are under new inventory. They are not supposed to increase the prices on sweetened beverages if those are still old stocks because the tax reform would only be imposed on new stocks,” he said.

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