MANILA, Philippines, July 14 (DOJ) — In a 16-page report, dated 29 June 2015, prepared by the Department of Justice-Office for Competition (DOJ-OFC), it found that the present Suggested Retail Price (SRP) mechanism as set by various government agencies removes incentives to compete on price.
“SRPs are set by various government agencies especially on how retail prices are determined for basic necessities and prime commodities,” said Secretary of Justice Leila M. de Lima. “We have pending cases against the rice, garlic and onion cartels that the SRP has failed to prevent or detect,” she said.
The OFC study said that there are no adequate rules and guidelines on the imposition of SRP. Although the Department of Trade and Industry (DTI) may oblige manufacturers, distributors and retailers to provide advance notice for proposed price increases, its requirement to seek clearance for planned price increases negates the re-commendatory nature of the SRP.
The recommended actions include the use of an appropriate term for the “suggested reasonable retail price,” e.g. Reference Retail Price (RRP), to distinguish it from the manufacturer-issued SRP. The OFC report emphasized that price controls be imposed only (a) during calamities, disasters and similar situations, and (b) over basic necessities and prime commodities.
“Suggested Retail Price should just be a suggestion—not an imposition by government. Price control distorts competition and does not help the market determine the optimum prices of goods,” as said by Assistant Secretary Geronimo L. Sy, Head of the OFC. “It is only in certain cases like calamities or emergencies that intervention is essential to prevent abuses by suppliers, he added.
