Wholesale prices of common commodities in the country have reached a seven-year high in 2021 as lockdown restrictions have been further relaxed in the last two months.
The General Wholesale Price Index (GWPI) fell to 4.1% year on year in December, the slowest since 4.2% in the previous month and 3.9% in October, according to preliminary data from the Philippine Statistics Authority (PSA).
However, GWPI was faster than the 2.4% seen in December 2020.
GWPI is used to monitor the wholesale trade sector and serves as a basis for price adjustment in business agreements and projects.
The December print brought full-year growth to 3%, the fastest pace since 3.5% in 2014.
The PSA said crude materials have seen a slower month-on-month price increase, inedible without fuel (17.2% to 6.7% in November); Fossil fuels, lubricants and related materials (34.2% to 26.3%); Chemical including animal and vegetable oils and fats (3.8% to 2.8%); And manufactured products are mainly classified by materials (6.4% to 6.3%).
On the other hand, food inflation rose to 3.3% in December from 2.8% in November. Drinks and tobacco have similarly increased from 4.8% to 5.7%.
Wholesale prices of machinery and transport equipment remained unchanged at 1.4%.
According to the main archipelago, bulk prices in Luzon fell to 4.1% in December from 4.3% in the previous month, while prices in Visayas rose from 1.4% to 2.2%. Bulk prices in Mindanao remained unchanged at 5%.
For the full year, bulk prices in Luzon rose from 2.5% in 2020 to 3.2% last year, while visas fell to 0.4% from the previous 0.9%. Mindanao bulk prices rose 4.6% on average last year from 1.6% in 2020.
Michael L., chief economist at Rizal Commercial Banking Corporation. Ricafort is responsible for the reopening of the economy due to the rise in bulk prices last year.
Metro Manila and surrounding areas were under less stringent warning level 2 status from November to December amid a decline in new coronavirus infections.
“Further recovery of the economy towards greater normalcy towards the end of 2021, especially with the shift to nationwide alert level systems from November 2021 or small scale / granular lockdown, has helped to increase production and supply in the economy, which is easily reflected in GWPI year after year.” He said in a text message.
However, Mr Rickafort warned that the continued rise in global oil prices could push bulk prices higher in the first quarter. Crude oil prices have risen since the beginning of the year, but rose above 100 100 a barrel in February after Russia’s invasion of Ukraine.
“For the coming months, higher transportation fares and wage proposals could potentially lead to the risk of a second round of inflation or higher prices for other affected goods and services in the economy, leading to higher GWPIs,” Mr Rickafort said.
A weaker peso-dollar exchange rate in early 2022 could lead to higher import prices and overall inflation, he added. – Meridel Irish U. Catilogo