Wholesale prices grow 5% in June 2014

According to the Institute for Development and Econometric Analysis, Inc. latest NewsBriefs, in June 2014, the general wholesale price index  continued to be elevated but eased to 5percent, from 5.2percent and 5.3percent in May and April 2014 respectively. A year ago in June 2013, the GWPI stood at 2.7percent.

Crude materials, indelible except fuels mainly accounted for the slowdown, followed by lower upticks in the indices for mineral fuels and lubricants, and chemicals including animal and vegetable oils and fats. On the other hand, the indices for food, manufactured goods, machinery and transport equipment were on the uptrend.

By region, the general wholesale price index  pulled back at 5percent in Luzon, 4.6percent in Visayas, and 5.6percent in Mindanao from their May 2014 growth rates. Although the regions differed in the commodity group indices that contributed to the decline in their general wholesale price index GWPI. The GWPI refers to the “changes in the price levels of commodities that flow into the wholesale trade intermediaries”; meanwhile, the Consumer Price Index refers to the “change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.” The two indicators closely track each other’s movement.

Likewise per same published report, following a deficit in June, the country’s balance of payments  swung to a whopping $501 million surplus in July 2014, the biggest since November 2013’s $837 million. The huge surplus last month brought the year to date BoP position at a $3.643 billion deficit, still far from the $1.1 billion surplus expected this year.

Furthermore per IDEA, NEDA’s Arsenio Balisacan and BSP’s Amando Tetangco, Jr., along with Moody’s Analytics Inc., are confident that the country grew much favorably in the second quarter of 2014 after the first quarter slowdown. Stronger remittances from Overseas Filipinos, government spending, robust manufacturing and the export surge all point to faster growth. Official second quarter GDP data will be released this Thursday.

Also, the government sets to collect P2.194 trillion in taxes next year, up 16.73percent from their target this year. The target collection will help finance the P2.606 trillion proposed budget spending in 2015. Meanwhile, in response to legislative bills seeking to cut tax rates, Finance Secretary Cesar Purisima and BIR Commissioner Kim Henares argue for a review of the whole tax code instead, favoring a more holistic approach.

On the other hand, the Bangko Sentral ng Pilipinas  reports that only 604 municipalities remain unbanked in 2013, noting the increased establishment of micro-banking offices designed to cater to low-income clients. MBOs grew from 370 in 2012 to 465 in 2013. However, Trade Secretary Gregory Domingo expressed concern over the financing gap between small enterprises and banks amid the upcoming ASEAN integration. Banks are reluctant to lend to small firms due to the hard loan requirements, according to the researchers of IDEA.

Editor’s Note: For comments, rejoinders and questions on credit and collection matters, Mr. Ed F. Limtingco can be reached at [email protected].