Wholesale price growth in May eases to 7.9% vs April

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GROWTH in wholesale goods prices eased in May compared to April, though the indicator picked up on a year-on-year comparison, according to preliminary data released by the Philippine Statistics Authority (PSA).

The May general wholesale price index (GWPI), which is based on 2012 prices, eased to 7.9% compared to April’s 8.3%. Price growth accelerated from the year-earlier level of 2.9%. 

May price growth was the lowest year-on-year rate since the 7.6% posted in March.

In the five months to May, the GWPI averaged 6.8%, against 2.8% over the same period last year.

The GWPI tracks the wholesale trade sector and serves as the basis for price adjustments in business contracts and projects.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said base effects may have come into play after price growth of wholesale goods accelerated over the previous months.

“In the short term we can expect overall production and sales to remain in expansion, albeit at a moderated pace as demand slows (due to higher prices) and output also decelerates (given tight supply chains and slowing demand),” Mr. Mapa said in an e-mail.

“We saw a slight deceleration in prices for food and fuels but we could see prices for these two items to resume the acceleration next month as supply chains remain tight,” Mr. Mapa said.

The PSA said the slower pace of growth in bulk prices during the month was driven by food (8.8% in May from 9% in April), crude materials, inedible except fuels (9.2% from 29.2%), chemicals including animal and vegetable oils and fats (6.6% from 8.4%), and machinery and transport equipment (1.4% from 1.7%).

Categories posting accelerating price growth were beverages and tobacco (6.6% in May from 6.5% April), mineral fuels, lubricants and related materials (57.5% from 53.3%), and manufactured goods classified chiefly by materials (7.9% from 7.8%).

Price growth in miscellaneous manufactured articles was unchanged from the previous month at 1.7%.

Luzon’s GWPI rose to 8.4% in May, easing from 8.8% in April, but accelerating from the 3% reading a year earlier.

In the Visayas, bulk price growth was 4.4%, against 4.3% in April and 0.8% in May 2021. Price growth here was the strongest since the 4.9% posted in August 2011.

Mindanao’s GWPI accelerated to 3.6% in May from 3.3% in April. On a year-on-year comparison, price growth eased from 4.2% in May 2021.

Mr. Mapa expects GWPI to continue expanding at a moderate pace, as supply chains tighten and commodity prices increase.

“The dip in some commodities due to recession fears can temper the acceleration however, and much will depend if the US can escape the dreaded hard landing,” Mr. Mapa said. — Ana Olivia A. Tirona