2. Manufacture of food products was the main contributor to the overall producer price for manufacturing

The top three industry divisions contributing to the June 2023 overall PPI for manufacturing were the following:

a. Manufacture of food products with 127.0 percent share;
b. Manufacture of beverages with 77.8 percent share; and
c. Manufacture of computer, electronic and optical products with 70.6 percent share.

3. Manufacture of dairy products was the main driver to the slowdown in the annual increase of producer price for food manufacturing

The PPI for the manufacture of food products posted an annual growth rate of 2.8 percent in June 2023. This was slower compared with the May 2023 and June 2022 annual growth rates of 3.6 percent and 10.3 percent, respectively.  (Figure 2, and Tables 1 and 2)

The deceleration in the annual growth of the PPI for manufacture of food products in June 2023 was primarily attributed to the slower annual increase in the manufacture of dairy products industry group, which posted an annual increment of 4.0 percent in June 2023 from 5.6 percent in the past month.

In addition, contributing to the slower annual growth of PPI for the manufacture of food products were the slowdowns noted in two industry groups. Moreover, manufacture of vegetable and animal oils and fats declined further in June 2023 with an annual drop of -11.3 percent in June 2023 from -10.8 percent in May 2023.

On the contrary, processing and preserving of fish, crustaceans and mollusks industry group registered a higher annual growth rate of 12.7 percent in June 2023 relative to the annual growth rate of 11.6 percent in May 2023. Meanwhile, processing and preserving of fruits and vegetables, and manufacture of other food products industry groups remained at their May 2023 annual rates.  (Table 2)

B.  Month-on-Month Growth for June 2023

1. Manufacture of computer, electronic and optical products remained the main driver to the monthly decrement of producer price index for manufacturing

Month-on-month, the PPI for manufacturing posted a decrement of -0.3 percent in June 2023, after exhibiting a 0.4 percent monthly growth rate in May 2023. In June 2022, a monthly increase of 1.2 percent was observed in the PPI for manufacturing.  (Figure 3, and Tables A and 1)

The monthly decrement of PPI in June 2023 was mainly contributed by the monthly decline recorded in manufacture of computer, electronic and optical products at -1.1 percent during the period from 2.2 percent monthly increase in May 2023. Completing the top three contributors to the monthly decrement of the PPI for manufacturing during the period were manufacture of transport equipment with a monthly drop of -0.3 percent from 0.5 percent monthly increment, and manufacture of beverages with a slower monthly growth rate of 0.1 percent from 1.0 percent in May 2023. These three industry divisions contributed 86.0 percent to the downtrend in the monthly growth rate of PPI for manufacturing in June 2023.

In addition, fourteen industry divisions registered monthly declines during the month. On the other hand, four industry divisions exhibited month-on-month increases in June 2023.

Meanwhile, printing and reproduction of recorded media recorded zero month-on-month rate during the period.  (Tables C and 1)

2. Manufacture of grain mill products, starches and starch products was the major contributor to the upturn in the monthly rate of producer price for food manufacturing

Month-on-month, the PPI for the manufacture of food products posted a higher increase of 0.2 percent in June 2023 compared with the 0.1 percent increase in May 2023. In June 2022, the PPI for the manufacture of food products grew at a monthly increment of 1.0 percent.  (Figure 4, Tables 1 and 2)

The monthly upturn in the PPI for food manufacturing during the period was mainly brought about by the monthly increases posted in manufacture of grain mill products, starches and starch products at 0.2 percent from a -0.9 percent monthly drop in May 2023; and manufacture of other food products at 0.8 percent during the month from 0.2 percent in the previous month. Moreover, two industry groups of manufacture of food products exhibited the same monthly rates during the period relative to May 2023.

On the other hand, slower monthly rates were observed in the three industry groups of manufacture of food products in June 2023 compared with the previous month. In addition, processing and preserving of fruits and vegetables posted a negative monthly rate of -0.2 percent from 0.8 percent monthly increase in May 2023.  (Table 2)

CLAIRE DENNIS S. MAPA, Ph.D.
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