If there is a Cabinet member who has an appreciation of what went on in terms of securing scarce supplies during the start of the health emergency, he would be Trade Secretary Ramon Lopez, since the Department of Trade and Industry (DTI) head was always on top of the situation.
He related that the minds of President Rodrigo Duterte and his men were fixed on stemming the rising infections afflicting mostly health workers, including doctors, and not making money during the initial phase of the pandemic.
On January last year, the country suffered a natural calamity when Taal Volcano exploded, which started the increased demand for masks.
The demand was for the thicker N95 mask which, prior to the eruption, was not even on the mind of consumers.
Lopez explained he needed to narrate the actual incidents that led to the massive government order of medical supplies that critics of the administration and a handful of senators said was grossly overpriced and used for kickbacks.
The events that transpired will make Filipinos realize the factors that determined the movement of prices based on the law of supply and demand.
Economic behavior provides the simplest explanation to the detractors who are, however, deaf to reason.
“Out of nothing, since before nobody thinks about masks, suddenly there was a surge in demand, so prices will naturally increase. To top it all, we don’t have a local producer, so we have to look for sellers abroad,” Lopez said.
A few companies answered the government’s call since the shortage was worldwide and rich countries pay more and quick, so there were few willing to commit through a contract.
Orders were again ramped up toward March prior to the declaration of the first enhanced community quarantine covering most of the country. “We held meetings almost daily at that time,” Lopez narrated.
After 15 March due to the spreading coronavirus disease 2019 as community transmission increased, the need for masks rose in parallel.
“I remember the price of a mask suddenly shot up from less than P1, it went up to about P8 from suppliers,” he said.
On 16 March, the DTI issued a suggested retail price (SRP) of P28 from P12 in February. The SRP lasted until 10 August.
“That means, up to that point, the price of a mask was at that level. On 9 September, the SRP was adjusted to P25.”
Over time, the DTI urged the repurposing of factories for the local manufacture of hospital implements, including critical medical devices.
Rebooting local production of masks at that time was challenging since the supply of raw materials, such as the transparent cloth used for it, became expensive and was hard to find.
Manufacturers who repurposed their facilities were encouraged to be listed with the Purchasing System of the Department of Budget and Management to facilitate bids.
The entire issue on prices of medical supplies has the simplest explanation that the presidential wannabes fail to absorb.
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