WHOLESALE PRICE growth in general goods was at the highest level in nearly a decade in November, while Metro Manila price growth in construction materials at the retail level was the highest in nearly three years that month as the case count for coronavirus disease 2019 (COVID-19) dropped in November.
According to preliminary data from the Philippine Statistics Authority, the general wholesale price index (GWPI) increased 4.2% year on year in November, accelerating from a rise of 3.9% in October and the 2.3% from a year earlier.
The November result was the highest reading since the 5.8% increase in December 2011.
The GWPI’s performance in November was driven by accelerating price increases compared to October in the following items: food (2.7% in November from 1.7% in October); beverages and tobacco (4.8% from 4.7%); mineral fuels, lubricants, and related materials (34.2% from 30.1%); and machinery transport and equipment (1.4% from 1.2%).
Meanwhile, price gains slowed in crude materials, inedible except fuels (17.3% from 34.4%) and chemicals including animal and vegetable oils and fats (3.8% from 5.2%).
Price growth in the following commodity groups was unchanged in November compared with October: manufactured goods classified chiefly by materials (6.4%) and miscellaneous manufactured articles (0.5%).
Wholesale prices picked up across the major island groups. In November, the GWPI in Luzon, the Visayas, and Mindanao accelerated to 4.3%, 1.4%, and 5%, respectively, from 4.1%, 0.8%, and 4.8%.
In the first 11 months of 2021, the national GWPI was 3.0%, averaging 3.1% in Luzon, 0.3% in the Visayas, and 4.5% in Mindanao.
The GWPI measures price changes of commodities that flow to wholesale trade intermediaries.
Meanwhile, the construction materials retail price index in the National Capital Region rose to 2.3% year on year in November from 2.1% in October and 1.7% in November 2020.
November’s reading was the highest growth rate since the 2.5% posted in December 2018.
The following commodity groups contributed to the pickup in November: carpentry materials and masonry materials (both at 1.4% in November from 1.3% in October); miscellaneous construction materials (3.4% from 2.8%); plumbing materials (2.9% from 1.8%); electrical materials (2.2% from 1.3%); and painting materials and related compounds (1.9% from 1.4%).
On the other hand, price growth in tinsmithry materials eased to 2.4% in November from 3.6% in October.
In the 11 months to November, construction retail price growth in Metro Manila averaged 1.5%, higher than the year-earlier 1.1%.
According to University of Asia and the Pacific Senior Economist Cid L. Terosa, demand for general goods increased as the Christmas season approached, and as business activity picked up due to the relaxed mobility restrictions following the decline in COVID-19 in November. As a result, wholesale prices rose.
He added that the same factors pushed up retail prices of construction materials.
“In general, expanding market activity and good economic conditions made construction more vibrant… (I)t could be taken as a sign of economic recovery since it can be associated with heightened consumer demand,” he said in an e-mail.
In an e-mail, Asian Institute of Management Economist John Paolo R. Rivera added that supply constraints continue as coronavirus variants emerge, putting upward pressure on prices.
“Supply cannot adjust as fast as demand,” Mr. Rivera said.
COVID-19 cases started waning in November after a surge in August with the emergence of the Delta variant. Easing of alert levels as well as mass vaccination further helped contain the virus.
For December, Mr. Terosa expects construction materials prices to rise due to rebuilding efforts in areas hit by Typhoon Odette (international name: Rai).
“I believe that the Omicron variant will not considerably slow down construction and related activities. Hence, the spread of the Omicron variant of the coronavirus disease will not dampen prices of construction materials as much as before,” he added.
Mr. Terosa expects construction materials to rise in the second quarter, with the election ban on infrastructure spending probably dampening prices in the first quarter. — Bernadette Therese M. Gadon and Lourdes O. Pilar