Filipino bakeries shrink ‘poor man’s bread’ as inflation bites

As the war in Ukraine pushes up wheat prices and a weaker peso increases the cost of imported cooking oil, many Filipino bakers are downsizing a popular breakfast sandwich to cope with higher inflation.

Slightly sweet and pillowy, pandesal, which Filipinos often dip in coffee or stuff with cheese, used to weigh 35 grams at Matimyas Bakery, a bread maker in suburban Manila.

But as the cost of local and imported ingredients has skyrocketed in recent months, co-owner Jam Mauleon gradually reduced the size of the bun — known as the “poor man’s bread” because it’s cheap — to around 25 grams, by one Increasing the amount to avoid 2.50 pesos (about $0.04) price.

She worried that even a small increase would send cash-strapped customers in her neighborhood to a competing bakery five blocks away.

“We had to reduce portion sizes to survive,” Mauleon told AFP, as children, workers and retirees arrived early to buy buns baked in a stone oven that morning.

As the Philippines lifted Covid-19 restrictions and schoolchildren returned to classrooms this year, Mauleon had hoped economic conditions for the bakery would improve.

But since December, when wheat and fuel prices soared, the price of flour has risen more than 30 percent, while sugar has risen 25 percent and salt has cost 40 percent more, she said.

The bakery survives day by day and does not make enough money to buy ingredients in bulk, making it vulnerable to price changes in domestic and international markets.

This week, after cutting staff and coping with higher costs, Mauleon was forced to raise the price of a pandesal by 20 percent to three pesos.

Further shrinking the roll would affect its quality, she said.

“We’ll try it if people are still buying it,” Mauleon said.

“Pandesal is very important in Filipino life.”

For mother of five, Laarni Guarino, the price hike means her family is now eating fewer bread rolls for breakfast.

“We will have to reorganize our budget. My kids only have to eat three to four out of every five,” Guarino, 35, told AFP.

“Fifty centavos is a big deal for poor people like us.”

Lucito Chavez, president of an association representing local bakeries, said thousands of breadmakers have been reeling from the higher cost of raw materials, most of which are imported.

“We are all fighting, not to make a profit but to survive,” Chávez told AFP.

“We must protect the pandesal industry.”

Inflation in the Philippines hit 6.1 percent in June, the highest in nearly four years, as soaring fuel price hikes pushed up food and transportation costs.

Legislator and economist Joey Salceda said bread would be hardest hit by “shrink deflation,” where a product’s size gets smaller but its price stays the same.

“Wheat prices are up 165 percent,” he recently told reporters, urging bakeries to fortify their products with vitamins and minerals.