Wholesale price growth slowed in 2023

MANILA, Philippines — Growth in bulk prices of goods in the country eased last year as food and three other commodity groups posted slower price increases, according to the Philippine Statistics Authority (PSA).

Data released by the PSA showed the average growth rate of the General Wholesale Price Index (GWPI) was at a slower 4.9 percent in 2023 from 7.3 percent in 2022.

The GWPI is an indicator designed to measure the changes in the levels of commodities that flow into the wholesale trade and intermediaries.

This, as four commodity groups registered slower average increases in 2023 relative to 2022 such as food (9.2 percent from 9.9 percent); chemicals including animal and vegetable oils and fats (0.2 percent from five percent); manufactured goods classified chiefly by materials (five percent from 5.9 percent); and machinery and transport equipment (1.2 percent from 1.4 percent).

Moreover, the crude materials, inedible except fuels, registered a 19.3 percent decline in 2023 from the 3.9 percent increase in 2022, and mineral fuels, lubricants and related materials posted a 7.3 percent drop last year from a 40.1 percent growth in 2022.

In Luzon, average GWPI growth was at 4.9 percent in 2023, slower than the previous year’s 7.7 percent.

Average GWPI growth in the Visayas also eased to 4.6 percent in 2023 from 5.3 percent in 2022.

In Mindanao, the average GWPI growth was at a slightly higher 4.3 percent in 2023 from 4.2 percent in 2022.

In December, the GWPI at the national level posted a slightly faster growth rate of 4.3 percent from the previous month’s 4.2 percent, but was lower than the 6.7 percent uptick in December 2022.

“The annual increase of the GWPI in the Philippines was primarily brought about by the slower annual decline recorded in mineral fuels, lubricants and related materials at 2.8 percent in December 2023 from a 6.7 percent annual drop in November 2023,” the PSA said.

In addition, two commodity groups had higher increments in December from the previous month such as chemicals including animal and vegetable oils and fats (1.8 percent from 1.5 percent) and miscellaneous manufactured articles (3.5 percent from 3.3 percent).

GWPI growth also went up in Luzon to 4.2 percent in December from 4.1 percent in November.

The growth picked up to 5.7 percent from 5.2 percent in the Visayas but eased in Mindanao eased to 3.5 percent from 3.6 percent.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said better weather conditions in the latter part of 2023, with an unusually lower number of typhoons or storms that hit the country helped improve the agricultural output that led to some easing of food prices, and relatively slower year-on-year increase in wholesale prices.

Ricafort said the stronger peso exchange rate against the US dollar toward the end of 2023 also partly reduced import costs that led to relatively lower increase in wholesale prices.

“For the coming months, risk of El Nino drought up to 2Q 2024, especially if a severe one, would lead to reduced rice and other agricultural output and could lead to some uptick in rice prices… and in other food prices as well, that, in turn, could contribute to some uptick in wholesale prices,” he said.