Millers drop plan to increase flour prices

MANILA, Philippines - A group of Philippine millers dropped an earlier plan to hike flour prices after the government committed to extend duty-free importation of milling wheat by six months. The Philippine Association of Flour Millers (Pafmil) will no longer pursue its proposal to increase a bag of flour by P20 after Trade Secretary Peter Favila gave an assurance that an Executive Order (EO) 765 will be enforced, the group said in a statement. The EO extends duty-free importation on milling wheat by half a year. As a result, local flour millers have agreed to shoulder whatever losses they will incur once the zero duty on milling wheat takes effect, Ric Pinca, Pafmil executive director, said. The zero duty on milling wheat has expired last June 21 after becoming effective in December 2008. The industry was slapped with a three-percent duty on every bag of imported wheat, translating to a P20 cost per bag, after the duty-free privilege expired, Pinca said. The EO to extend the duty-free importation is seen to become effective immediately upon publication on Friday, July11. Bread flour will remain at the price range of P790 to P810 per 25 kilogram bag for hard flour and P690 to P710 for soft flour. The P20-price increase would have caused price of bread flour to rise to P830 and soft flour to cost P730 per bag. "This is also our way of appreciating the government's efforts in ensuring that the flour industry maintains its competitive level against subsidized foreign competition," Pinca said. Hard flour is used for baking bread products such as pan de sal and loaf bread while soft flour is for pastries. - GMANews.TV