January NCR retail price growth nears 2-year low

Retail price growth in the National Capital Region (NCR) eased to its slowest pace in 23 months in January as food prices eased, the Philippine Statistics Authority (PSA) reported on Friday.

The annual rate of the general retail price index (GRPI) in Metro Manila went up by 2.5% year on year in January, slower than the 6.3% growth a year ago.

It also eased from 2.9% print in December last year.

January’s growth was the slowest since the 2.2% recorded in February 2022.

The decline in the GRPI in NCR was primarily driven by the slower annual increase in the heavily weighted food index followed by an easing in indices of machinery and transport equipment, PSA said in a press release.

The heavily weighted food index slowed to 3.7% in January from 4.4% in December. This was followed by machinery and transport equipment at 1.1% from 1.3%.

Analysts attributed the slowdown to seasonality factors and higher base effects a year ago.

“Seasonality [may be a factor as] food prices tend to fluctuate throughout the year.

January sometimes sees temporary dips due to post-holiday sales and increased agricultural production,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail interview that there was improved agricultural output in recent months thanks to the “unusually lower number of typhoons that hit the country in the latter part of 2023.”

Mr. Roces added that falling global prices for food and energy may have translated to slower GRPI growth.

“The [6.3%] GRPI in January last year [created] a higher base for comparison, making it appear there was a slowdown than it might be in absolute terms,” Mr. Roces said.

Slower annual increments were also seen in crude materials, inedible except fuel (1.9% in January from 2.5% in December). Meanwhile, the decline in mineral fuels, lubricants, and related materials eased to 1.3% in January from the 1.4% contraction in December 2023.

On the other hand, indices of beverages and tobacco (5.2% in January from 4.9% in December), and miscellaneous manufactured articles (1.5% from 1.4%) posted faster growth.

Chemicals, including animal and vegetable oils and fats, as well as manufactured goods classified chiefly by materials steadied at 2.7% and 1.9%, respectively.

Despite the downtrend in retail prices, Mr. Ricafort said that a pick up in the capital region’s GRPI may occur in the coming months due to easing base effects and El Niño risks in the second quarter of 2024.