YEAR-ON-YEAR wholesale price growth in general goods eased in September compared with August, according to data released by the Philippine Statistics Authority (PSA).

The general wholesale price index (GWPI) rose 2.2% year on year in September, against 2.4% in August.

The GWPI’s performance in September was driven by slower year-on-year price increases compared to a month earlier in the following materials: food (4.3% in September against 4.4% in August); beverages and tobacco (4.5% from 5.1%), crude materials, inedible except fuels (26.1% from 24.6%); chemicals including animal and vegetable oils and fats (1.1% from 1.3%); and manufactured goods classified chiefly by materials (0.7% from 1.3%).

Price growth rates that were unchanged from the rate recorded the previous month included those for machinery and transport equipment (0.4%) and miscellaneous manufactured articles (0.5%). Meanwhile, mineral fuels, lubricants and related materials posted a 6.1% decline in September, against the minus 4.1% recorded in August.

In a separate data release, the PSA reported that year-on-year wholesale price growth of construction materials in Metro Manila was unchanged in November compared with a month prior.

Metro Manila’s construction materials wholesale price index grew 0.8% year on year in November, the same rise recorded in October.

Posting higher price growth were hardware (3.4% in November from 3% in October), lumber (3.7% from 3%), tileworks (14.4% from 13.8%), and painting works (0.7% from 0.6%).

Registering slower price growth were sand and gravel (0.9% from 1.7%) and electrical works (1.4% from 1.5%).

Construction materials posting price declines were plywood (minus 0.2%); reinforcing and structural steel (minus 1.0%); plumbing fixtures and accessories/waterworks (minus 1.5%); and fuels and lubricants (minus 11.9%).

Commodities in which price growth was unchanged from October were concrete products (1.1%); galvanized iron sheets (0.9%); glass and glass products (7.1%); doors, jambs, and steel casements (0.2%); polyvinyl chloride (PVC) pipes (4.4%), asphalt (0%); and machinery and equipment rentals (0%).

In an e-mail, Security Bank Corp. Chief Economist Robert Dan J. Roces said the GWPI result “validates” the consumer price index (CPI) results over the same period. The CPI forms the basis for headline inflation.

“[A]s a deflator to consumer price growth, the latest GWPI reading shows that supply levels were essentially better amid steady or slower demand in September” he said.

“We expect the [GWPI] to be higher in the next readings as supply — notably in the food index — was severely affected by the recent typhoons,” he added.

Headline inflation was 2.3% in September, decelerating from 2.4% in August. The PSA attributed the slowdown mainly to the performance of food and non-alcoholic beverages, which are heavily weighted in the CPI.

In an e-mail, ING Bank NV Manila Senior Economist Nicholas Antonio T. Mapa said the subdued wholesale prices reflect economic activity being “stuck on low gear.”

“We expect this trend to continue as hobbled domestic demand keeps a lid of demand-side pressure on wholesale and eventually retail prices,” he said.

Mr. Mapa also noted that construction was one of the sectors hit hard by the pandemic, with real estate developers “hitting the brakes” on new projects on expectation of soft demand in the months ahead.

“Thus, we’ve seen modest price gains in construction material, all the more given the slow recovery in the government’s ‘Build, Build, Build’ efforts amidst the lockdowns,” he said.

Mr. Mapa expects “downward pressure” on wholesale prices in the coming months in the absence of demand, which could offset slight price increases due to typhoon-related supply disruptions. — Michelle Anne P. Soliman