PRICEWATCH A shopper scans a shelf of “noche buena” items in a supermarket in Quezon City to check the lowest prices. —GRIG C. MONTEGRANDE
Don’t be surprised if you are getting less for the same price for certain products as “shrinkflation” is real in the Philippines.
Defined as companies’ practice of maintaining product prices by reducing the amount or volume, the phenomenon is likely here to stay for some time as Filipinos struggle to stretch their peso amid the unabated increase in the prices of basic goods and services.
“Shrinkflation, pinag-uusapan natin; nagtataas ang presyo, lumiliit ang laman. Sobrang liit na eh, [halos] wala nang laman. Sobrang liit na eh. (Shrinkflation, we’re talking about it; prices are rising while products are shrinking. It’s too small that there’s almost nothing to consume. It’s too small). For example sardines, 155 (grams) is the regular size [of a can of sardines then] it became 140 (grams) to fit a buyer’s budget,” explained Steven Cua, president of the Philippine Amalgamated Supermarkets Association.
Indeed, many manufacturing companies have been unable to raise prices to reflect the full cost of production for fear of pricing themselves out of their market. To compensate for the increased costs, they reduce the amount or volume.
Food security issue
Inflation or the rate of increase in the prices of goods and services that Filipino households typically purchase sizzled to a 14-year high of 18.7 percent at the start of 2023 but slowed to a 20-month low of 4.1 percent in November. However, the average this year of over 6 percent is still far from the target range of 2 to 4 percent.
Cua’s concerns were highlighted during a media forum organized by Capstone-Intel Corp., where he drew attention to the impact of shrinkflation on Filipino consumers, urging the government to take decisive action against this “silent” price increase that has adversely affected Filipinos’ food security.
According to a recent survey conducted by Capstone-Intel on food security, only about three of five respondents expect to be “food secured” or will have enough food to meet their needs in the next six months. The rest, on the other hand, are uncertain about their prospects with 8 percent considering themselves “insecure” or “very insecure” when it comes to food.
The survey also disclosed that 46 percent of households spent between P1,001 and P2,500 a week on food, which accounted for the biggest share of Filipino households’ expenses at about 72 percent.
Given this, Ella Kristina Domingo-Coronel, research and publications director at Capstone-Intel, stressed the significance of stable food costs to stretch family budgets.
“Persistently elevated food inflation could rapidly push more households into financial distress without mechanisms to offset price pressures on key dietary necessities,” said Domingo-Coronel.
Cua thus urged the government to support local industries to increase output of key food products to mitigate the impact of rising costs and tackle the pressing issue of food insecurity.
He warned that more Filipinos might be pushed into unemployment if proactive measures were not taken to make local products, especially food, more competitive and affordable to most Filipinos.
“Either we have to come up with new brands or a lot of foreigners are coming in with their brands. That’s another surge of [unemployment]. Filipinos will lose their jobs, then we’ll turn to imported products, which are cheaper, and [it will be a] heyday for smugglers,” he cautioned.
READ: PH inflation slows further, moves closer to target