Buyers to feel weaker peso’s pinch in 2017

THE president of the Philippine Retailers Association (PRA) in Cebu expects price increases to be felt starting next year if the peso continues to weaken against the dollar.

Robert Go, in an interview, said that while the last quarter of 2016 did not show significant price increases despite recent developments in the peso-dollar exchange rate, consumers may feel the effects as early as the first quarter of 2017.

“The supermarkets and stores already bought their stocks for December around September or October,” Go said. The businessman owns the Prince Retail chain that has over 30 branches in the Visayas and Mindanao.

The peso-dollar now hovers close to the P50 level, something that exporters hankered for nearly a decade ago. Last Friday, the peso closed at P49.922 to the US dollar. Around this time last year, the rate was P47.30, according to records kept by the central bank.

Inflation

Latest data from the Philippine Statistics Authority (PSA) seem to reflect Go’s statement on price increases, as inflation in November this year hit its fastest pace in 21 months.

Headline inflation was 2.5 percent last month, higher than October’s 2.3 percent. November’s level exceeded the central bank’s forecast for the month of between 1.6 and 2.4 percent.

Core inflation, which strips out volatile food and fuel items, also rose to 2.4 percent in November from a year earlier. The increases were influenced by price hikes in non-food items such as housing, water, electricity, fuels, and transport.

“It’s likely that next year, in first quarter, we will really feel the increase,” said Go.