r - revised

•    Producer Price Index keeps negative annual rate

Producer Price Index (PPI, 2000=100) for the manufacturing industry slowly decreased to  8.9 percent in May 2013 from negative 9.4 percent in April 2013, compared with the year ago level, according to the preliminary results of the Monthly Producer Price Survey. Four major sectors reflected significant decreases led by furniture and fixtures (35.8%).  Other sectors that posted double-digit decreases were: rubber and plastic products (-13.5%), machinery except electrical (-12.6%) and  basic metals  (-11.3%). On the other hand, increases in the PPI were observed in six major sectors led by printing (9.0%). Refer to Tables 1 and A-1.

On a month-on-month basis, PPI picked up by 0.4 percent in May 2013 from negative 0.7 percent in April 2013. Uptick in producer prices were noted in nine major sectors led by machinery except electrical (2.4%). Five major sectors reflected flat growths while the other six sectors posted decrements.  Refer to Tables 1 and A-2.

TABLE A-1   Producer Price Index, April 2013 – May 2013

                 (2000 =100)

TABLE A-2   Producer Price Index, May 2013 – April 2013

                      (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 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 May 2013 is 88.6 percent, which corresponds to the retrieval of 311 establishments’ reports out of the 351 samples for the survey.  Refer to Table 2.

(Sgd) CARMELITA N. ERICTA
                Administrator