October wholesale price growth fastest in 7 years

The Philippines’ wholesale price growth of general goods climbed to its highest level in seven years in October as global and domestic price pressures caught up.  

Preliminary data from the Philippine Statistics Authority (PSA) showed the general wholesale price index (GWPI) accelerated to 3.9% annually in October, picking up from 3.3% in September and 2% recorded in the same month of 2020.  

The October figure was the fastest reading in seven years or since the 4.1% print in October 2014, the statistics agency’s data showed.  

In the 10 months to October, the GWPI averaged 2.9%, higher than the 2.4% during the same period in 2020.  

The GWPI is used to monitor the wholesale trade sector and serves as a basis for price adjustments in business contracts and projects.  

The PSA said the acceleration in bulk prices during the month to the following commodities: crude materials, inedible except fuels (34.4% from 21.6% in September); mineral fuels, lubricants, and related materials (30.1% from 22.8%); chemicals including animal and vegetable oils and fats (5.2% from 4.3%); manufactured goods classified chiefly by materials (6.4% from 5.8%); and food (1.7% from 1.3%).  

However, price growth slowed down for beverages and tobacco at 4.7% in October from 5.3% in the previous month.  

Machinery and transport equipment as well as miscellaneous manufactured articles were unchanged at 1.2% and 0.5%, respectively.  

By island group, Luzon’s GWPI rose by 4.1% in October, following a 3.4% in September. It was faster than 2.2% in October 2020.  

In the Visayas, the bulk prices inched up 0.8%, from 0.4% the previous month and a rebound from the 0.1% contraction seen in October 2020.  

Growth in Mindanao’s GWPI, meanwhile, eased to 4.8% from the 4.9% in September 2021 but still higher than 1.9% growth seen a year ago.  

While lagging consumer price trends for a bit, the wholesale price index data “are finally starting to catch up as both global and domestic price pressures continue to mount,” Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said in a Viber message.  

Headline inflation in October slowed to three-month low of 4.6% as food costs eased. This was the third straight month that it exceeded the central bank’s 2-4% target. It was slower than the 4.8% in September but faster than 2.5% in October 2020.  

This easing headline inflation trend continued for the remaining months of 2021, bringing the full-year inflation to 4.5%, still above the 2-4% target band and missing the 4.4% central bank forecast for the year.  

“Rising cost to producers are likely to be aggravated by the weakening peso as imports continue to soar as part of the [Philippines’] reopening and recovery story in 2022,” Mr. Neri said.  

Balance of trade in goods reached a record $4.71-billion deficit in November as imports continue to outpace exports, latest preliminary data from the PSA showed.  

This brought the trade balance to a $37.92-billion shortfall from January to November last year, wider than the $22.15-billion deficit recorded in the same period in 2020. — Ana Olivia A. Tirona