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Growth in retail prices of building materials in the National Capital Region (NCR) continued to increase in July, reaching its highest level in over 13 years, the Philippine Statistics Authority (PSA) said in a report by Philippine Star.
The PSA said the annual growth in the Construction Materials Retail Price Index (CMRPI) in NCR rose further to seven percent in July from the 6.8 percent seen in June.
“This is the highest recorded annual growth rate of the index since January 2009,” the PSA said.
It is also higher than the 1.4 percent growth in July last year.
Of the three commodity groups, PSA said three had higher mark-ups such as painting materials and related compounds, carpentry materials, and masonry materials.
The painting materials and related compounds index, in particular, went up 5.7 percent in July from 4.6 percent in June.
Carpentry materials climbed to 3.2 percent from 2.5 percent, while masonry materials increased to 4.4 percent from 4.3 percent.
On the other hand, those with lower annual upticks in July were electrical materials, plumbing materials, tinsmithry materials, and miscellaneous construction materials.
Growth in NCR’s CMRPI averaged 5.4 percent from January to July.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email that the elevated retail prices of construction materials in NCR reflect the higher global oil and commodity prices triggered by the conflict between Russia and Ukraine, as well as the second round inflation effects following higher wages in various regions and higher transport fares from June to July.
He said the weaker peso exchange rate that led to higher prices of imported products, also contributed to the uptick in construction materials’ retail prices.
“Moreover, the further reopening of the economy towards greater normalcy also led to some pick up in construction and other economic activities that fundamentally led to some increase in demand and prices for construction materials,” he said.
In addition, he said increased infrastructure spending helped drive the increase in demand and prices of construction materials.
“Going forward, higher inflation, interest rates, and risks of recession in the US, which is the world’s largest economy, could slow down the demand and prices of construction materials, as well as the recent decline the prices of crude oil and other global commodity prices that could fundamentally lead to some easing in the prices of construction materials,” he said.