MANILA, Philippines — Factory gate prices declined in October as producer prices in nine commodity groups fell, the Philippine Statistics Authority (PSA) reported yesterday.
The PSA said the Producer Price Index (PPI) for manufacturing contracted by 0.6 percent in October 2018 from a growth of 0.2 percent in September and 0.6 percent in October 2017.
This was attributed to the decline in the indices of eight major commodity groups, with non-metallic mineral products posting the fastest decline at 10.3 percent.
Other sectors that registered losses during the reference period were chemical products, rubber and plastic products, food manufacturing, furniture and fixtures, wood and wood products, leather products, and fabricated metal products.
Meanwhile, growth was seen in the index in 12 commodity groups, the fastest of which was in tobacco products which registered a growth of 18.2 percent in October.
Upticks were also seen in the indices of 11 other commodity groups rose, petroleum products, electrical machinery, beverages, basic metals, miscellaneous manufactures, paper and paper products, textiles, printing, footwear and wearing apparel, transport equipment, and machinery except electrical.
The PPI also declined month-on-month to 0.3 percent from the previous month’s of 0.7 percent growth. Eleven major industry groups pulled down the monthly PPI, led by basic metals with a negative growth of one percent.
The index is used to derive indicators for the Volume of Production Index (VoPI) and Volume of Net Sales (VoNSI) which reflects factory output.
Rising consumer prices weakened the purchasing power of most Filipinos in the past few months, causing demand to slow down in the second and third quarters of the year.
It is widely expected, however, that stabilizing inflation along with rapidly declining oil prices should provide consumption a boost in the coming months.
The Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) for October showed firms reporting a strong influx of orders, putting the domestic manufacturing sector in expansion territory.
Inflationary pressures, however, continued to bite as domestic manufacturers continued to bear the burden of strong cost inflation during the month because of higher prices of raw materials, new excise taxes and the weaker peso.
To protect profit margins, firms once again raised the prices of their products.