Factory gate prices stabilize in December 2018

MANILA, Philippines — Growth in factory gate prices stabilized in December 2018 as seven industry groups registered weaker growth during the period, the Philippine Statistics Authority (PSA) said.

The Producer Price Index (PPI) for manufacturing registered a 0.8 percent year-on-year growth in December 2018, the same as in November 2018.

This was a slight reversal from the 1.1 percent contraction in December 2017.

Month-on-month, the PPI declined by 0.2 percent in December 2018 from negative 0.1 percent in November 2018.

Factory gate prices of the following commodity groups declined in December 2018: transport equipment, rubber and plastic products, leather products, furniture and fixtures, wood and wood products, chemical products and food manufacturing.

Earlier, the Nikkei Philippines Manufacturing Purchasing Managers Index (PMI) for December 2018 showed Philippine manufacturers raised prices modestly in December 2018 because of the slower rise in input costs.

Although still solid, cost inflation was the softest seen in two years.

Higher prices for raw materials, a stronger dollar, and the tax reform law remained the key factors behind inflation.

Waning input cost inflation was greatly helped by falling oil prices and recovery in the peso-dollar exchange rate toward the end of 2018.

Stabilizing factory gate prices in December tracks the easing of the headline inflation rate to 5.1 percent in December from a year-decade peak of 6.7 percent in October.