Manila: The retail price index of construction materials in the National Capital Region (NCR) eased in August compared to the previous month. Data released by the Philippine Statistics Authority (PSA) showed that the construction materials retail price index (CMRPI) eased to 2 percent in August from 2.1 percent in July.

According to Philippines News Agency, the PSA attributed this change to the slower annual increase in miscellaneous construction materials, which decreased to 1.1 percent from 1.8 percent the previous month. Additionally, slower annual increases were recorded in the indices of carpentry materials and masonry materials, which fell to 0.6 percent and 2.3 percent, from 0.9 percent and 2.4 percent in July, respectively.

In a Viber message, Rizal Commercial Banking Corporation chief economist Michael Ricafort noted that the lower CMRPI could partly reflect a slowdown in construction activities. This slowdown is attributed to government underspending due to anomalous flood-control projects, increased vacancy rates in offices, and higher inflation and interest rates, which have increased borrowing costs. Ricafort stated that these factors slowed down construction activities, reducing the demand and retail prices of construction materials.

Ricafort further indicated that for the coming months, higher global crude oil prices, higher inflation, and a near-record-high U.S. dollar/peso exchange rate could lead to higher prices of construction materials. He added that catch-up spending by the national government, especially on infrastructure projects to stimulate the economy amid geopolitical risks, could fundamentally lead to a pickup in construction activities and subsequently increase demand and prices of construction materials.