Onions put the Philippines in a stew over food price inflation

MANILA – Putting quality over profit during inflationary times, Manila restaurant manager Ely Cundangan has refused to mess with her signature beef marrow stew – the same amount of onions must go in the pot no matter what.

“Our ingredients have become so expensive that we are earning almost nothing. But we can’t change the recipe,” said the 76-year-old, while taking a break from cooking to man the cash register. “Our customers will surely notice, and we want to keep our customers happy.”

Elected in June 2022, President Ferdinand Marcos Jr has struggled to fulfil campaign promises to bring down inflation, which hit 8.7 per cent in January, driven by an 11.2 per cent jump in food prices, the biggest since 2009.

Like the rest of the world, the Philippines is paying a lot more for energy imports, but it is

the soaring prices of staple foodstuffs

that has become hardest to stomach.

The cost of onions – a mainstay in almost all Philippine dishes – shot up from about 70 pesos (S$1.70) a kilogram in April 2022 to as much as 700 pesos last December, making them more expensive than meat.

Awkwardly for Mr Marcos, who also holds the agriculture portfolio, the onion shortages stemmed largely from import delays. Imported onions, bought mostly from India and China, require sanitary and phytosanitary permits for quarantine and biosecurity purposes.

Acknowledging that part of the fault lay with poor planning, Mr Marcos has acted to speed up imports and prices have tumbled from last December’s highs, but rates in a Manila wet market are still around double the year-ago levels.

“The price of onion is still like gold,” said Ms Joey Reyes, a 52-year-old grocery store owner who is waiting for prices to come down a lot further before she starts stocking onions again.

Not just onions

Consumer frustration is limited for now to social media memes, with some finding humour the best way to deal with hardship.

A bride from Iloilo city became the talk of the town after she walked down the aisle with a bouquet of onions, while one enterprising florist in the capital sold bouquets festooned with onions and chillies for Valentine’s Day.

“We wanted to have a different type of flower arrangement (for Valentine’s Day), especially since the prices of onions have gone up and we’d like to join the trend,” 25-year-old florist Nhits Evangelista told Reuters.

Earlier in February, a branch of Japan Home Centre, a popular chain of retail stores in Manila, accepted onions as payment for a day, promising to donate the onions to food banks for families unable to afford the staple.

It is not just onions that cost more.

Steep price rises for eggs and sugar

have also whacked up the cost of putting food on the table.

Owing to import delays and damage to crops from bad weather, the price of a kilogram of sugar has nearly doubled to 100 pesos from a year ago, hitting beverage companies, while eggs, which cost six pesos each in 2022, now sell at 10 pesos each as hatcheries are still reeling from outbreaks of avian flu.

Opposition politicians have criticised Mr Marcos for not acting sooner to control spiralling prices, saying he should relinquish the agriculture portfolio and appoint a minister who can dedicate himself to the task.

And farmers are worried that the belated surge in imports will end up weakening prices just as they take their own onions to market during the February to April harvest season.

“We are nervous. We will get nothing from what we have worked hard for,” said 41-year-old Jon-Jon Taberna, an onion farmer from Nueva Ecija province. “No matter how good the crop is, if prices are depressed, you won’t make money.”

‘Unsolved’ food supply issues

Officials say the high inflation is transitory and should ease once supply issues are addressed. But January’s higher-than-anticipated inflation reading has raised economists’ expectations that interest rates will rise further, after going up 350 basis points in 2022.

Economic growth is projected to slow sharply in 2023, after a forecast-beating 7.6 per cent bounce-back in 2022 from the Covid-19 pandemic, and some economists reckon the official view on inflation may be too optimistic.

“The underlying drivers of inflation may be moving away from a transitory nature, (towards) more persistent factors such as an unsolved food supply problem which drives up costs,” said Mr Robert Dan Roces, an economist at Security Bank. REUTERS