Nationwide bulk prices of general goods rose to its highest level in nearly seven years in September due to higher fuel prices and the low base effect.
Preliminary data from the Philippine Statistics Authority (PSA) on Friday showed the country’s general wholesale price index (GWPI), which monitors the wholesale trade sector and serves as a basis for price adjustments in business contracts and projects, picked up to 3.3% in September from 3.2% in August and 2.2% in September 2020.
It was the highest reading in 82 months or almost seven years since the 3.7% growth recorded in November 2014, the PSA data showed.
The statistics agency attributed the surge that month to the following commodities: mineral fuels, lubricants and related materials (22.8% from 19.4% in August); beverages and tobacco (5.3% from 4.7%); food (1.3% from 1%); manufactured goods classified chiefly by materials (5.8% from 5.6%); miscellaneous manufactured articles (0.5% from 0.3%; and machinery and transport equipment (1.2% from 1%).
Slower growth rates were recorded in chemicals including animal and vegetable oils and fats (4.3% in September from 5.3% in August) and crude materials, inedible except fuels (21.6% from 29.6%).
By island group, Luzon reflected the national level’s pace as its GWPI climbed by 3.4% in September, higher than the 3.2% in August and 2.3% in September last year.
The GWPI of the Visayas and Mindanao, meanwhile, eased to 0.4% (from 1.1% in August) and 4.9% (from 5.2%), respectively.
The oil price increases in September triggered the higher GWPI print, Cid L. Terosa, senior economist at the University of Asia and the Pacific School of Economics, said in an e-mail interview.
“Base effects were at play aside from higher prices of production inputs such as mineral fuels due to supply chain disruptions, bottlenecks, and rigidities,” Mr. Terosa said.
Price adjustments for gasoline, diesel, and kerosene increased by P15.10, P12.95, and P10.65 per liter, respectively, data from the Energy department as of end-September showed.
The rise in wholesale prices can trigger an increase in retail prices, which can pull back the economic growth momentum, he added.
“Towards the end of the year, the annual GWPI will rise faster than last year as demand continues to pick up due to the easing of pandemic-related restrictions. Also, supply bottlenecks can add upward pressure on wholesale prices,” Mr. Terosa said. — Bernadette Therese M. Gadon