Trade department presses bakers to temper price increases

The Trade department conceded on Tuesday that raising bread prices was necessary due to the rise in sugar costs, but went on to urge bakers to reduce their planned price increases. "The increase in bread prices cannot be prevented," Trade Undersecretary Zenaida C. Maglaya told reporters in a briefing. "But our computations show that [the price hike for a 600-gram loaf should be] a maximum P1.50," she said, contrary to bakers' plans to slap a P2 hike. The department's calculations assumed the same sugar price bakers based their price hike on — P54 per kilo. A 10-piece pack of pandesal, meanwhile, costs only 50 centavos more and not a peso, Maglaya said. Sugar retailed for P54 per kilo in Metro Manila as of end-January, up from P45 a month ago and P36 in January 2009, Bureau of Agricultural Statistics data showed. Sought for comment, however, Philippine Baking Industry President Walter Co said bakers were sticking to their original plan of price hikes. "We have waited for more than three months for this increase, so it is not a spur of the moment increase on our part," Co said in a telephone interview. "I think you also have to consider that when we sell to supermarkets, they need a margin [of profit] also. The price hike is not just for covering the cost of production," Co said. Maglaya, anticipating the group's refusal to lower their planned price increases, said bakers would have to submit a breakdown of their computations. — Jessica Anne D. Hermosa, BusinessWorld