Prices of building materials in Metro Manila up on weak peso

Retail prices of construction materials in Metro Manila rose in September as the peso weakened while global oil prices increased, the Philippine Statistics Authority (PSA) reported on Monday.

According to the PSA, the rate of increase of building materials as measured by the construction materials retail price index inched up to 1.2 percent in September, from 1.1 percent in the previous month and from last year.

This was the highest point in eight months or since the 1.4-percent growth in January.

Bulk prices as measured by the construction materials wholesale price index stood at 0.3 percent, slower than the 2.2 percent a year ago, making it the weakest growth in almost seven years.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the fluctuating currency drove the uptick in retail prices.

“Imported global commodities, such as oil and minerals, are priced in US dollars. As a result, a weaker peso combined with rising world prices for oil and other commodities makes construction materials more expensive,” Ricafort told Inquirer.

If these would continue, expect the prices of building materials to post further increases in the coming months, he added.

The statistics agency attributed the rise in retail prices of construction materials to plumbing materials, which posted a faster growth rate of 0.8 percent from 0.2 percent in August.

Materials for carpentry increased 0.7 percent from 0.6 percent. This was followed by painting materials and related compounds, up 2.1 percent from 1.9 percent.

While wholesale prices of building materials retained its year-on-year expansion in September, certain indices showed slower growth, including reinforcing steel, which posted a 1-percent increase from 1.2 percent, and tileworks, 0.4 percent from 1.2 percent.

Meanwhile, prices of plywood decelerated to -0.4 percent from the 0.4-percent expansion in the previous month, while fuels and lubricants slowed down to 0.8 percent, following a much larger increase of 3.5 percent in August.