Increase in the costs of building materials in the National Capital Region (NCR) lessened in January amid decreased interest rates and a depreciated peso, as reported by the Philippine Statistics Authority (PSA) on Friday.
Based on initial data, the January construction materials retail price index (CMRPI) decelerated to 1.2% in January, down from 1.5% recorded in December and 1.4% noted in the same month last year.
The rise in the CMRPI in the National Capital Region (NCR) was the slowest in five months, since the 1.1% recorded in August 2024.
“A depreciated peso has rendered imported building materials less expensive,” Cid L. Terosa, a senior economist at the University of Asia and the Pacific, stated in an e-mail interview.
The peso concluded at P58.365 against the dollar in January, weakening from P57.845 at the end of December 2024.
Mr. Terosa further remarked that lower interest rates have limited the production costs of construction materials.
In the past year, the Bangko Sentral ng Pilipinas implemented a cumulative 75 basis points in rate reductions since initiating its easing cycle in August, resulting in a key rate of 5.75%.
“Decreased demand for construction materials due to relatively fewer building activities amidst an oversupply of residential and office spaces has led to slower price increases across most construction materials,” Mr. Terosa explained.
The PSA additionally noted that the main reason for NCR’s slower annual CMRPI growth was the downturn in the heavily weighted tinsmithry materials index, which increased by 1.6% in January, down from 2.6% in December 2024.
Tinsmithry materials constitute the largest commodity category in the index, representing 21.76% of the CMRPI.
Other commodity groups also experienced slower price growths, including electrical materials (1.8% from 1.9%), painting materials and related products (2.2% from 2.6%), plumbing supplies (0.8% from 1%), and miscellaneous construction materials (0.6% from 0.8%).
Only carpentry materials recorded a price increase at 1%, rising from 0.8% the previous month.
In a different report from the PSA, the construction materials wholesale price index (CMWPI) cooled to a historic low of 0.1%, down from 0.2% in December and 1.5% in January of the previous year.
The CMRPI is based on 2012 constant prices, while the CMWPI uses 2018 constant prices.
Out of the 20 categories, four commodities exhibited accelerated price increases, six experienced slower growth, four remained unchanged, and six commodities saw price declines.
The PSA attributed the slower annual CMWPI growth mainly to price reductions in reinforcing steel and PVC pipes, which fell by 0.3% (from 1.2%) and 0.1% (from 0.9%), respectively.
Other categories that experienced price declines included hardware (0.1% from 0.7%), G.I. sheet (0.3% from 0.4%), structural steel (-0.9% from -0.5%), metal products (0% from 0.1%), electrical works (0.3% from 0.4%), plumbing fixtures and waterworks (0.7% from 1.2%), painting works (1.1% from 1.2%), and fuels and lubricants (-3.4% from -1.2%).
The indices for concrete products, glass and glass items, asphalt, and rental machinery and equipment remained unchanged.
Mr. Terosa indicated that trade policies from US President Donald J. Trump and the ongoing trade conflicts among significant exporters of construction materials are crucial factors to monitor in the upcoming months.
Since assuming office in January, Mr. Trump has placed tariffs on imports from China while suspending duties on goods from Mexico and Canada.
He is also contemplating imposing “reciprocal tariffs” on any country levying taxes on US imports, raising concerns of an extended global trade conflict, as reported by Reuters.
“If the downward trend in prices across most construction materials persists despite the strained global trade landscape, construction activities and real estate development in the NCR will benefit.” — Pierce Oel A. Montalvo