r - revised

•    Producer Price Index decreases at a slower rate

Producer Price Index (PPI, 2000=100) for manufacturing slowly decreased to 5.6 percent in October 2013 from negative 6.7 percent in September 2013, compared with the year ago level, according to the preliminary results of the Monthly Producer Price Survey. Furniture and fixtures (-37.0%) led the ten sectors that reflected decreases. The other two sectors that reflected significant decrements were: basic metals (-12.1%) and machinery except electrical (-10.4%). On the other hand, miscellaneous manufactures with an increase of 12.4 percent led the ten sectors that posted increases. Refer to Tables 1 and A-1.

On a month-on-month basis, PPI went up to 0.3 percent in October 2013 from a negative 1.1 percent in September 2013. Seven major sectors reflected single-digit increases led by furniture and fixtures (9.3%). On the other hand, seven sectors posted flat growths while six sectors posted deceases. Refer to Tables 1 and A-2

                TABLE A-1   Producer Price Index, September 2013 – October 2013

                 (2000 =100)

                 TABLE A-2   Producer Price Index, September 2013 – October 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 (PSIC) to classify sectors and industries. Twenty industry classes of the 2009 PSIC were grouped to form the industry coverage of the 2013 PPS. These are presented in the table below.

•    Response Rate

The response rate for October 2013 is 84.6 percent, which corresponds to the retrieval of 297 establishments’ reports out of the 351 samples for the survey.  Refer to Table B.

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