Factory gate prices rise slightly in June

MANILA, Philippines — Factory gate prices rose at a slightly faster pace in June on the back of the acceleration in the prices of furniture and fixtures, the Philippine Statistics Authority (PSA) said yesterday.

The Producer Price Index (PPI) for manufacturing grew at an annual rate of one percent in June, marginally faster than the 0.9 percent pace in May and the same rate as in June 2018.

PSA attributed the growth in PPI to faster growth in the index of furniture and fixture that registered an annual growth of 57.9 percent in June from 47.9 percent in May.

Slower growth, meanwhile, was seen in the indices of the following commodity groups: non-metallic mineral products, rubber and plastic products, beverages, tobacco products and printing.

Declines in factory gate prices, meanwhile, were seen in the following commodity groups: Food manufacturing, transport equipment, chemical products, basic metals, machinery, petroleum products, fabricated metal, footwear and apparel, leather products, miscellaneous manufactures, wood products, paper products, and textiles.

In June, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) for the Philippines registered a subdued recovery as new orders expanded minimally.

The headline PMI rose slightly to 51.3 in June from 51.2 in May. Despite the weak improvement, this still puts the domestic manufacturing industry in expansionary mode as a reading of below 50 indicates contraction.

During the month, Philippine manufacturing bucked the contraction in factory output in the ASEAN region.

IHS Markit said that during the month, firms stepped up input purchasing at the fastest pace in seven months to service the increase in demand and to take advantage of better conditions in Manila’s ports to increase inventories of input stocks.

Manufacturers reported a minimal increase in input costs at the end of the second quarter primarily because of a weak peso and increased taxes.

As such, firms raised the prices of their products anew, but only modestly.