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Still In Shock

Posted by on 23 October 2009

It’s been a week since my Philippine trip but I am still in shock over the prices of basic food items over there.

Grocery shopping in the Philippines

Grocery shopping in the Philippines

Take refined white sugar, for instance — it costs only RM1.55 per kilogram in Malaysia but P36 to P40 (RM2.58 to RM2.87) in the Philippines.

Cooking oil in Malaysia, which is normally sold in 5-liter bottles, retails for RM13.35, which translates to RM2.67/liter. In contrast, cooking oil in the Philippines costs P42 to P46 for a 750-mL bottle, which is equivalent to P56 to P61.33 (RM4.03 to RM4.41) per liter.

We’re talking about basic household necessities here, people! Not some fancy-schmancy stuff like horse supplements or car accessories.

I understand that the Philippines is fragmented into more than 7,700 islands, thereby presenting a huge distribution challenge which translates into added cost. And granted that the cost of production may vary from country to country. Hence, I decided to take a look at the price of Nestlé Koko Crunch cereal, which is manufactured in the Philippines. Logically, since it’s made in the Philippines, it should be cheaper in the Philippines, right? Wrong! A 500-gram pack in a shopping centre in Cebu costs about RM20 whereas it’s only RM13.59 in most hypermarkets in Malaysia. How is that logically possible?!

So who gets most of the profit then? The retailer? The wholesaler? The distributor? The manufacturer? Whatever the answer may be, I only know one thing for sure — it’s the Filipino consumer who suffers.

[NB: I made some errors in the conversion and have corrected the figures. The difference is not as big as I initially calculated…but the difference is still significant. Sorry about that. Current rate is around PHP13.90:MYR1.]

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