r-revised

•    Producer Price Index continues its negative trend

Producer Price Index (PPI, 2000=100) for the manufacturing industry recorded a drop of  3.6 percent in December 2012, compared with the year ago level, according to the preliminary results of the Monthly Producer Price Survey.  Fourteen (14) major sectors contributed to the decrease led by furniture and fixtures (-16.9%). The three other sectors that posted significant decrements were the following: electrical machinery (-11.3%); wood and wood products (-11.2%) and basic metals (-10.0%). On the other hand, increases in the PPI were recorded in six major sectors led by rubber and plastic products (6.8%). Refer to Tables 1 and A-1.

On a month-on-month basis, PPI slowly decreased to 0.4 percent in December 2012 from negative 0.8 percent in November 2012. Six major sectors posted single-digit declines led by furniture and fixtures (-5.4%). On the other hand, six sectors posted increases in PPI led by electrical machinery (0.6%) while eight major sectors posted flat growths.  Refer to Tables 1 and A-2

TABLE A-1   Producer Price Index, November 2012 – December 2012

                 (2000 =100)

TABLE A-2   Producer Price Index, December 2012 – November 2012

                      (2000 = 100)

             Note:                                                   

Technical Notes

•   Introduction

The National Statistics Office generates various price indices, one of these is the Producer Price Index (PPI). The PPI, a  designated statistics, is generated through the results of the Producer Price Survey (PPS) conducted nationwide. The survey gathers monthly producer prices of selected products of establishments included in the market basket.

The PPI is used as a deflator of the Monthly Integrated Survey of Selected Industries (MISSI) to derive indicators for the Volume of Production Index (VoPI) and Volume of Net Sales (VoNSI).

•  Method of Index Computation

PPI utilizes the Paasche-type method of index computation. The weights are computed from the value of production to derive concentration ratios from the Census of Philippine Business and Industry (CPBI) or Annual Survey of Philippine Business and Industry (ASPBI). The weights are updated as soon as new results of the ASPBI or CPBI are available and applied at the beginning of each survey year.

For the 2012 PPI, the weights of the major sectors and sub-sectors were computed from the results of the 2009 ASPBI for Manufacturing Establishments with total employment of 20 and over, which is the latest survey results.

The formulas in the computation of the PPI are as follows:

• Industry Coverage

The industry classification of the 2012 PPI utilizes the amended 1994 Philippine Standard Industry Classification. There are 20 major sectors covered by the 2012 PPS with three consisting of subsectors.

• Response Rate

The response rate for December 2012 is 85.8 percent, which corresponds to the retrieval of 283 sample establishments’  reports.  Refer to Table 2.

Non-responding sample establishments are estimated using cold-deck imputation method. Revisions to the preliminary estimates are done upon receipt of actual reports from late respondents.

(Sgd) CARMELITA N. ERICTA
              Administrator