Rising prices hurt both consumers and retailers

While consumers have been complaining about the rising prices, retailers are likewise feeling the pinch.

In a phone interview with Philippine Franchise Association president Richard Sanz, he said retailers are adjusting to the rising costs of raw materials.

"The retail sector, which includes F&B (food and beverage), restaurants and retail services are starting to feel the effects of the higher inflation," he told The FREEMAN.

"We have started to see some establishments increase the selling prices of their products due to the increasing prices of raw materials like rice and sugar to compensate for shrinking profit margins," said Sanz, who is CEO of FoodAsia Group.

Some establishments, he pointed out, are just "absorbing the higher prices of raw materials because increasing their selling prices might decrease their sales volume further."

Inflation has continued to rise since the start of the year when the government implemented a new tax law which imposes higher taxes on fuel and sweetened beverages.

Last month, the country’s consumer price index rose 5.7%, seeing the highest rate in about five years. Sanz believes supply woes are causing the rising prices.

"I however see this as a temporary setback until the supply stabilizes," the businessman said.

"The surge in inflation is caused by a number of factors which is mainly supply-driven," he noted. He raised the solution to flood the market with basic commodities especially rice, sugar and flour.

"These commodities affect everyone and higher prices of basic commodities will definitely decrease the disposable income of consumers, thus affecting the sales of establishments," Sanz further explained.

"But at the end of the day, Filipino entrepreneurs will adjust and find the bright side of things and create new products using alternative, cheaper raw materials," the PFA official said.