2. Manufacture of beverages was the main contributor to the overall annual growth rate of producer price for manufactured goods

The top three industry divisions contributing to the December 2023 overall annual growth rate of PPI for manufacturing were the following:

a. Manufacture of beverages;                 
b. Manufacture of computer, electronic and optical products; and                 
c. Manufacture of food products.

3.  Manufacture of dairy products was the main contributor to the deceleration in the annual rate of producer price for food manufacturing

The PPI for the manufacture of food products posted an annual increase of 0.7 percent in December 2023. This was slower compared with the November 2023 annual increment of 1.2 percent. In December 2022, the PPI for the manufacture of food products registered an annual increase of 8.3 percent. (Figure 2, and Tables 1 and 2)

The slower annual increase of the PPI for manufacture of food products in December 2023 from November 2023 was primarily attributed to the deceleration in the annual uptick of manufacture of dairy products industry group at 1.1 percent during the period from 3.0 percent in November 2023.

Also contributing to the slower annual growth of PPI for the manufacture of food products were the slowdowns in the annual increases of three industry groups. Moreover, manufacture of vegetable and animal oils and fats, which declined further in December 2023 at 8.1 percent from a 7.6 percent annual drop in November 2023, contributed to the slower annual growth of PPI for the manufacture of food products. (Table 2) 
 

B.  Month-on-Month Growth for December 2023

1. Manufacture of coke and refined petroleum products was the main contributor to the faster decline in the monthly rate of producer price index for manufacturing section

Month-on-month, the PPI for manufacturing registered a faster decrease of 0.21 percent in December 2023 from a 0.16 percent monthly decline in November 2023. In December 2022, PPI also posted a monthly decrease of 0.7 percent. (Figure 3, and Tables A and 1)
 

The top contributor to the faster monthly decrement of PPI in December 2023 was manufacture of coke and refined petroleum products, which registered a faster monthly decline of 0.8 percent during the period from a 0.3 percent month-on-month decrease in November 2023. Completing the top three contributors to the faster monthly decline of PPI for manufacturing during the period were manufacture of computer, electronic and optical products with a faster monthly drop of 0.6 percent in December 2023 from a 0.4 percent monthly decrease in the previous month, and manufacture of food products with a monthly downturn of 0.1 percent during the period from a 0.1 percent monthly increment in November 2023. These three industry divisions contributed 65.0 percent to the faster month-on-month decrease of PPI for manufacturing in December 2023.

Of the remaining 19 industry divisions, 11 registered monthly increments, six exhibited month-on-month declines, and two recorded zero percent month-on-month rates during the period. (Tables C and 1)   
 

2. Processing and preserving of fish, crustaceans and mollusks was the major contributor to the downtrend of the month-on-month growth rate of producer price for food manufacturing

Month-on-month, the growth rate of PPI for the manufacture of food products posted a decline of 0.1 percent in December 2023 from a 0.1 percent monthly increment in November 2023. In December 2022, the PPI for the manufacture of food products posted a monthly increment of 0.5 percent. (Figure 4, and Tables 1 and 2)

The downtrend in the monthly rate of PPI for food manufacturing during the period was brought about by four of the eight industry groups. This was led by the processing and preserving of fish, crustaceans and mollusks, which declined by 2.0 percent in December 2023 from a monthly increment of 1.3 percent in November 2023. This industry group contributed 63.3 percent to the downtrend of the month-on-month rate of PPI for the manufacture of food products.

On the other hand, manufacture of prepared animal feeds and processing and preserving of meat posted monthly increases of 0.6 percent and 0.1 percent, respectively. Moreover, manufacture of other food products registered a monthly increment of 0.05 percent from a 0.3 percent monthly decline in the previous month. Processing and preserving of fruits and vegetables registered monthly increase of 0.1 from a 0.04 percent increase in November 2023. (Table 2)    
 

C.  Annual Average PPI and Growth Rates for 2023

The annual average growth rate of PPI in 2023 was 1.5 percent. This was slower compared with the annual average increase of 6.5 percent in 2022. In 2021, the annual average drop of PPI was posted at 1.8 percent. (Table D)

The slowdown in the annual average year-on-year growth rate of PPI in 2023 was mainly attributed by the annual average decline in the manufacture of coke and refined petroleum products at 3.6 percent from an annual average increment of 16.8 percent in 2022. Also contributed to the slower annual average increase of PPI in 2023 were the manufacture of food products, which exhibited deceleration in its annual average growth at 3.0 percent in 2023 from an 8.7 percent annual average increase in the previous year, and manufacture of transport equipment posting an annual average decline of 3.3 percent in 2023 from a 3.9 percent annual average increment in 2022. These three industry divisions contributed 69.5 percent to the slower annual average increment of PPI for manufacturing in 2023.  (Table 1)

Meanwhile, the deceleration in the PPI for manufacture of food products in 2023 from 2022 was mainly contributed by the annual average decrease noted in the manufacture of vegetable and animal oils and fats at 9.6 percent in 2023 from an 8.8 percent annual average increase in 2022. (Table 2)

CLAIRE DENNIS S. MAPA, PhD                 
Undersecretary                 
National Statistician and Civil Registrar General

I.1. Background of the Survey

The Producer Price Survey (PPS) is conducted by PSA to collect monthly producer prices of industry products produced by sample establishments in the manufacturing section. It measures the average change over time in the prices of products or commodities produced by domestic manufactures and sold at factory gate prices to wholesalers and/or other consumers in the domestic market relative to a base period.

I.2. Objectives

The PPS serves various purposes. It is used to (1) measure monthly or yearly changes in the producer price of key products/commodities in the manufacturing section; (2) to serve as deflator to Value of Production Index (VaPI) and Value of Net Sales Index (VaNSI) in the estimation of the Volume of Production Index (VoPI) and Volume of Net Sales Index (VoNSI) for the Monthly Integrated Survey of Selected Industries (MISSI), respectively; and, (3) to serve as a deflator in the estimation of manufacturing production in real terms (at constant prices) in the system of national accounts.

I.3. Historical Information on the Survey

The PPI milestones are shown below:

1980

Studies on the generation of the PPI started when the Index of Physical Volume of Production series being generated by the then Central Bank of the Philippines (now the Bangko Sentral ng Pilipinas) was discontinued.  This came about because of the transfer of responsibility of operations and processing of the Monthly Survey of Establishments (MSE) for manufacturing from the Central Bank to the National Census and Statistics Office (National Statistics Office-NSO).

Work on the original PPI started with 1978 as the base year and was later revised to 1985.  The source of data for the PPI was the then Monthly Survey of Establishments (MSE) for manufacturing.  The MSE has a rider questionnaire, which asked for data on production of major products of the sample establishments.  However, the PPI series were never released as official statistics.  It was later observed that the components of the PPI were no longer reflective of the prevailing production structure of the manufacturing sector that the PPI operations were halted.

1992 to 1993

The compilation of the PPI with 1992 as the base year was revived in a-project “Improvement of the Producer Price Index of Selected Manufactured Products” through the Grants-in-Aid Program of the National Statistical Coordination Board (NSCB).

The NSO with guidance from the Technical Committee on Price Statistics of NSCB worked for further improvements to the PPI to make it more reflective of the actual situation of the manufacturing sector.  The conduct of the Producer Price Survey started as the source of data for the PPI.

Starting with this new base year, the PPI was officially released simultaneous with the SKEM indicators. The SKEM was later renamed to MISSI.

2001

The NSO released the rebased series of PPI with 1994 as the new base year.  The 1992-based series continued until December 2001 and was discontinued the year after.  The 1994-based series had January 1998 as the earliest series.

2005

The work on the rebasing of the PPI to base year 2000 started.

2007

The PPI data series with 2000 as the new base period was released in August, in parallel with the 1994-based series.  The 2000-based series had January 2001 as its earliest series.

2008

The 1994-based PPI data series was discontinued beginning January.

2011

The rebasing of the PPI series to base year 2006 started. This is in accordance with NSCB Resolution No. 2, series of 2009 which approves the synchronized rebasing of the price indices to base year 2006.

2014

The rebasing of the PPI series to base year 2006 was halted. Instead, rebasing of the PPI series to base year 2012 started since the results of the 2012 Census of Philippine Business and Industry (CPBI) was available as source of the weights.

2015

The use of geometric average of short-term price relatives of responding sample establishments was used as the imputation technique for the missing data of non-responding samples.

2017

The rebasing of the PPI series to base year 2012 began. The industry classification followed the Amended1994 Philippine Standard Industrial Classification (PSIC) which was the same as the 2000-based series.

2019

The computation for the 2012-based series continued but the industry classification used was according to the 2009 PSIC (22 industry division).

2020

The rebasing of the 2012-based PPI series was stopped. Instead, it was decided that the PPI series be rebased to 2018. The rebased PPI series which followed the 2009 PSIC was approved by the PSA Board on December 2020. The index computation methodology was still the same, Chained-Paasche type.

I.4. Scope and Coverage

PPS is a nationwide undertaking that covers all manufacturing establishments confined to the formal section of the economy. The formal sector of the economy consists of the following:

1. Corporations and partnership, regardless of employment size;                 
2. Cooperatives and foundations, regardless of employment size;                 
3. Single proprietorships with branches, regardless of employment size; and                 
4. Single proprietorship with no branches but with total employment (TE) of 10 and over.

Hence, the PPS covered all establishments regardless of employment size, except those establishments with:

1. Legal Organization of single proprietorship (LO=1), and                 
2. Economic Organization of single establishment (EO=1), and                 
3. TE of less than 10.

The scope and coverage for PPS are all establishments with EO=1 (Single establishment), 2 (Branch only) and 3 (Establishment and main office) engaged in manufacturing activities as classified in the 2009 PSIC.

I.5. Industry Coverage

The industry structure or classification for PPS follows the Philippine Systems of National Accounts (PSNA) grouping. Further, the PSNA grouping follows the 2009 PSIC for the 2018 base period.

* Industry divisions categorized further into industry groups

II.1. Data Collection

Distribution and collection of PPS questionnaires will be done according to a timetable set. Distribution is done at the beginning of each year through personal visit by PSA field staff to the sample establishments located in the provinces and cities nationwide. Collection of accomplished questionnaires as well as submission of data files is done on or before the 23rd day after each reference month.

II.2. Survey Instrument

The PPS uses a shuttle-type of questionnaire. This is the type of survey instrument that is administered to respondents in order to collect data at frequent intervals of time to provide a running account of past responses. The questionnaire also includes definition of terms and specific instructions in filling-out the questionnaire to assist the respondent in understanding the questions and for ease in accomplishment. Furthermore, the questionnaire design ensures and enhances the consistency and accuracy in reporting past data.

II.3. Data Items

The survey collects prices and the percentage share of each of the top five products to the total value of products manufactured by the sample establishments. The top five products manufactured by the establishment must have the following characteristics:

• Product Name                 
• Brand Name                 
• Specification                 
• Unit of measure                 
• Percent share of the product to total value of products manufactured                 
• Reason for the increase/decrease in producer price for the month