• Producer Price Index posts improvement

Producer Price Index (PPI, 2000=100) for the manufacturing sector picked up to 1.6 percent in May 2012 from 1.5 percent in April, according to the preliminary results of the monthly Producer Price Survey. The uptick can be attributed to the increases reflected by eight major sectors led by publishing and printing (6.1%), petroleum products (5.8%) and machinery except electrical (5.8%). On the other hand, twelve major sectors posted decrements led by furniture and fixtures (-23.8%). Refer to Tables 1 and 1-B.

However, on a monthly basis, PPI declined by -0.2 percent in May 2012. This was influenced by the decrease in actual prices of the following major sectors: petroleum products (-4.9%); basic metals (-4.7%); fabricated metal products (-1.8%); chemical products (-1.6%); transport equipment (-0.6%) and food manufacturing (-0.2%). Refer to Tables 1 and 1-B.

                                                                 TECHNICAL NOTES

• Introduction

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

The PPI is the 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 Index (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.

   

  1994 PSIC CODE	INDUSTRY DESCRIPTION
  15 except 155	Food Manufacturing
  155	Beverages
  16	Tobacco products
  17	Textiles
  18,174 and 192	Footwear and wearing apparel
  191	Leather products
  20	Wood and wood products
  21	Paper and paper products
  22	Publishing and printing
  23	Petroleum products
  24	Chemical products
  25	Rubber and plastic products*
  26	Non-metallic mineral products*
  27	Basic metals*
  28	Fabricated metal products
  29 and 30	Machinery except electrical
  31 and 32	Electrical machinery
  34 and 35	Transport equipment
  36	Furniture and fixtures
  33, 37 and 39	Miscellaneous manufactures

                                                 Note: * - Major sectors categorized into sub-sectors