NCR building material inflation quickens in May

By Isa Jane D. Acabal, Researcher

WHOLESALE and retail prices of construction materials in Metro Manila accelerated to nearly three-year highs in May, driven by strong demand and persistent cost pressures, analysts said.

Preliminary data from the Philippine Statistics Authority (PSA) showed the construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) rose to 2.8% in May from 0.2% a year earlier and 1.9% in April.

This was the strongest reading in nearly three years or since the 5.6% growth posted in August 2023.

From January to May, CMWPI growth averaged 1.6% from 0.2% in the same period in 2025.

In a separate report, the PSA said year-on-year growth in the construction materials retail price index (CMRPI) in the NCR picked up to 1.8% in May from 1% in the same month in 2025 and 1.7% in April.

This was also the strongest reading in almost three years or since the 1.9% in June 2023.

In the five months to May, CMRPI growth averaged 1.5%, higher than the 1.1% in the same period last year.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., attributed the faster rise in construction materials prices to “a mix of firm demand and lingering cost pressures.”

“You’ve got ongoing infrastructure and construction activity supporting demand, while input costs — like cement, steel, and fuel — along with logistics, are still filtering through the system,” he said in a Viber message.

Despite easing inflation in May, Mr. Ravelas noted that construction costs are “sticky” and are slow to decline.

Inflation quickened to 6.8% in May, faster than the 1.3% print a year ago but slowed from 7.2% in April.

Ateneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Peña-Reyes said the combined effects of “cost-push factors, supply-chain conditions, and demand-side pressures” contributed to the uptick in building prices in May.

He said the acceleration of prices at both the wholesale and retail levels suggests broad-based pressure across the construction supply chain.

“The most likely explanation is a combination of higher energy and logistics costs, some pickup or normalization in construction activity, lagged pass-through of earlier cost increases, and possible supply constraints in key materials,” he said in a Viber message.

Mr. Peña-Reyes said easing inflation in May “likely helped prevent a sharper acceleration in construction materials prices, but it did not reverse or significantly reduce cost pressures.”

According to the PSA, the CMWPI growth was driven by a faster annual increase in concrete products at 4.5% in May from 0.3% a year ago and 3.4% in April.

Quicker price growth was logged in lumber (1.1% in May from 0.7% in April), reinforcing steel (2.1% from 0.5%), structural steel (1.6% from 1.2%), tileworks (1.9% from 0.7%), doors, jambs, and steel casement (0.5% from 0.4%), electrical works (1.9% from 1.5%), plumbing fixtures and accessories/waterworks (0.5% from 0.4%), and painting works (3.8% from 1.9%).

Meanwhile, year-on-year growth was recorded in cement at 0.2% in May, a turnaround from the 1.5% decline a year ago and the 0.6% drop in April.

Price growth slowed in sand and gravel (3.1% in May from 3.2% in April), hardware (0.1% from 0.3%), and fuels and lubricants (7.8% from 13.6%).

On the other hand, declines were recorded in plywood at -0.1% from a 0.2% growth in April and metal products at -0.1%, a reversal from the 0.1% increase in the previous month.

PVC pipes declined further to 0.2% in May from 0.1% in the previous month.

RETAIL PRICES
Meanwhile, the PSA said the uptrend in the annual growth of the CMRPI was due to painting materials and related compounds index, which rose to 2.9% in May from 2.1% a year earlier and 2.2% in April.

Faster yearly increases were also noted in electrical materials (2% in May from 1.9% in April), masonry materials (2% from 1.9%), plumbing materials (0.8% from 0.5%), tinsmithry materials (2.9% from 2.5%), and miscellaneous construction materials (1.6% from 1.5%).

The growth in carpentry materials remained steady at 0.6%.

“What we’re seeing in concrete and paint materials reflects where we are in the build cycle — strong infra demand for concrete, and finishing activity driving paint prices, with added pressure from oil-linked chemical inputs,” Mr. Ravelas said.

In the coming months, Mr. Ravelas said price increases in construction materials are expected to be “steady but moderate.”

“The key drivers to watch are energy prices and overall inflation trends. For now, the environment calls for careful cost management and timing of projects, because while pressures are no longer surging, they’re definitely not going away,” he said.

Mr. Peña-Reyes said construction material inflation will face “moderate but uneven upward pressure.”

“The outlook depends less on headline inflation and more on a few construction-specific drivers: energy costs, infrastructure activity, exchange rates, and supply conditions,” he added.

The CMRPI is based on 2012 constant prices, while the CMWPI is based on 2018 constant prices.