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•    Producer Price Index posts negative annual rate since June 2012

Producer Price Index (PPI, 2000=100) for manufacturing declined by 6.0 percent in July 2013, compared with the year ago level, according to the preliminary results of the Monthly Producer Price Survey. This was influenced by the decrements reflected by eleven sectors led by furniture and fixtures (-33.4%), basic metals (-13.8%), rubber and plastic products (-12.9%) and machinery except electrical (-10.3%). On the other hand, nine sectors posted increases led by printing (9.0%). Refer to Tables 1 and A-1.

On a monthly basis, PPI moved down by 1.1 percent in July 2013 from 0.7 percent in June 2013. Nine major sectors contributed to the turnaround with furniture and fixtures significantly pulling down the monthly PPI with a -16.3 percent decrease. Moreover, the heavily weighted petroleum products and electrical machinery sectors, with monthly rates of   -1.3 percent and -1.1 percent, respectively, also brought about the overall negative monthly performance of the PPI. In addition, five sectors posted flat growths while six sectors reflected increments. Refer to Tables 1 and A-2

TABLE A-1   Producer Price Index, June 2013 – July 2013

                 (2000 =100)

TABLE A-2   Producer Price Index, July 2013 – June 2013

                      (2000 = 100)

                        Notes:                 

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 2013 PPI, the weights of the major sectors and sub-sectors were computed from the results of the 2010 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

Starting with January 2013 reference month, the PPI utilizes the 2009 Philippine Standard Industry Classification to classify sectors and industries. There are 20 major sectors covered by the 2013 PPS with three consisting of subsectors.

•    Response Rate

The response rate for July 2013 is 88.0 percent, which corresponds to the retrieval  of 309 establishments’ reports out of the 351 samples for the survey.  Refer to Table 2.

Missing prices for products of sample establishments are estimated using the short-term relative change of all available prices within the same industry class. Revisions to the preliminary estimates are done upon receipt of actual reports from late respondents.

(Sgd) CARMELITA N. ERICTA
                Administrator