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Growth in November bulk prices eases to nine-month low

GROWTH in the bulk prices of general goods eased to a nine-month low in November as supply stabilized.

According to preliminary data from the Philippine Statistics Authority (PSA), the general wholesale price index (GWPI) rose 7.2% year on year in November from 7.6% a month earlier. In November 2021, the GWPI rose 4.2%.

The November indicator was the lowest since the 5.6% reported in February 2022.

In the 11 months to November, GWPI was 7.4%, accelerating from 3% a year earlier.

In an e-mail, Security Bank Corp. Chief Economist Robert Dan J. Roces said that the GWPI was impacted by lower global commodity costs and improved supply, as well as a peso recovery in November.

“Moreover, the decrease in the mineral fuels commodity has a significant impact on the GWPI with it being a major component of the index. Other commodities that may have slowed the GWPI include industrial inputs and consumer goods where inventories may have been higher in the lead-up to the peak consumption season in December,” he added.

Among eight categories of commodity, five posted declines. Price growth in mineral fuels, lubricants and related materials eased to 25.9% from 28.6% in October. Other categories where price growth eased were chemicals including animal and vegetable oils and fats (2.5% in November from 3.4% in October), and food (12.3% from 12.9%).

On the other hand, price growth in miscellaneous manufactured articles accelerated to 3.8% in November from 3.3% in October. Price growth in manufactured goods classified chiefly by materials and machinery transport equipment commodities was unchanged at 4.2% and 1.2%, respectively.

The peso hit lows in October to the P59 level against the dollar. The peso recovered the P56 level, ending November at P56.56.

In a Viber message, Asian Institute of Management Economist John Paolo R. Rivera said GWPI reflected the reduced supply constraints on manufactured goods in the later part of the year. He added that growth in the GWPI would have been lower if not for the high demand during the holidays.

Luzon outpaced national GWPI growth with 7.4% in November, slowing from the 7.8% posted in October. The year-earlier price growth for the region was 4.3%.

November marked the lowest growth in GWPI since the 5.9% posted in February.

Mr. Rivera said Luzon GWPI reflects the island’s highly urbanized and industrialized nature, leading to higher demand compared with the Visayas and Mindanao.

Meanwhile, price growth in the Visayas and Mindanao eased to 6.5% and 4.8%, respectively in November from 6.6% and 4.9% in October.

The Visayas reading was the lowest since the 6.2% logged in August. Year-earlier GWPI growth came in at 1.4%.

Mindanao’s GWPI increase was the lowest since the 4% reading in September 2022. The year-earlier GWPI rise was 5%.

Mr. Roces warns of volatile prices in the coming months due to changes in supply and a post-holiday slowdown in demand.

“Price increases will slow down if supply constraints are addressed particularly in (agricultural) production,” Mr. Rivera said, adding that he sees the GWPI in the last month of 2022 picking up due to seasonal factors. — Bernadette Therese M. Gadon

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