GROWTH in wholesale prices for general goods in January was 4.6%, the highest since late 2011, according to preliminary data released by the Philippine Statistics Authority (PSA).
The rise in the general wholesale price index (GWPI) accelerated from 2.1% year on year in January 2021 and also exceeded the 4.1% rate posted in December.
The January reading was the highest in 121 months, when the indicator grew 5.8% in December 2011.
“This can be attributed to the spillover of increased demand from the previous quarter (fourth quarter 2021) when a lot of restrictions were being eased due to declining cases of COVID-19 (coronavirus disease 2019),” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail interview.
“This suggests that demand may have (picked up despite) the Omicron-induced surge last January and domestic demand was continuing to recover.”
To contain the Omicron surge in the coronavirus, Metro Manila and surrounding areas were placed under the Alert Level 3 quarantine setting. This was later eased to Alert Level 2 in February. Restrictions were eased in the capital region and nearby areas since March, with a move to Alert Level 1.
The food component of the index rose 3.9% in January from 3.3% in December. Food carries a 36.8% weight in the theoretical wholesale basket of goods, with the base year at 2012.
Price growth in manufactured goods classified chiefly by materials, which account for a fifth of the wholesale basket, came in at 6.4%, up from 6.3% a month earlier.
Other commodities where price growth accelerated in January were crude materials, inedible except fuels (16.3% from 6.7% in December); mineral fuels, lubricants, and related materials (30.5% from 26.3%); chemicals including animal and vegetable oils and fats (4.4% from 2.8%); and miscellaneous manufactured articles (0.8% from 0.6%).
Price growth eased for beverages and tobacco (4.4% from 5.7%) and machinery and transport equipment (1.2% from 1.4%).
Wholesale price growth in Luzon accelerated to 4.7% in January from 4.1% in December. A year earlier, bulk price growth in Luzon was 2.3%.
Gains for Luzon were also the highest in more than a decade, or since the 6.6% posted in December 2011.
In the Visayas, wholesale price growth for general goods was 3.2%, against 2.2% in December. The January reading was level with the year-earlier reading and was the highest since the 3.5% posted in October 2011.
Meanwhile, bulk price growth in Mindanao eased 4.2% in January from 5% a month earlier. Growth was still higher than the January 2021 reading of 2.8%.
Over the remainder of the year, Mr. Asuncion expects wholesale prices to continue firming in the absence of further infection surges that could force the government to reimpose strict mobility curbs.
“However, external events such as the Ukraine conflict and its impact and the recent China lockdowns may dampen the outlook for 2022,” he said.
The GWPI is used to monitor the wholesale trade sector and serves as a basis for price adjustments in business contracts and projects. — Abigail Marie P. Yraola
