2. Manufacture of computer, electronic and optical products was the main contributor to the overall producer price for manufacturing

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

a. Manufacture of computer, electronic and optical products with 52.3 percent share;
b. Manufacture of food products with 48.5 percent share; and
c. Manufacture of beverages with 21.3 percent share.

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

The PPI for the manufacture of food products registered a slower annual increment of 3.7 percent in May 2023 compared with the 4.7 percent annual upturn in April 2023. The PPI for manufacture of food products also posted an annual increase of 9.6 percent in May 2022.  (Figure 2, and Tables 1 and 2)

The deceleration in the annual growth of the PPI for the manufacture of food products in May 2023 was primarily attributed to the lower annual increase observed in the manufacture of dairy products industry group with 5.6 percent annual increment in May 2023 from 7.5 percent in the previous month.

In addition, contributing to the slower annual growth of PPI for the manufacture of food products were the slowdowns noted in three industry groups of manufacture of food products. Moreover, manufacture of vegetable and animal oils and fats declined further in May 2023 with an annual drop -10.7 percent in May 2023 from -9.3 percent in the previous month.

On the contrary, there were two industry groups that registered higher annual growth rates in May 2023 relative to April 2023. Meanwhile, processing and preserving of fruits and vegetables recorded a slower negative annual growth of -0.6 percent during the month from -2.0 percent in April 2023. (Table 2)

B.  Month-on-Month Growth for May 2023

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

Month-on-month, the PPI for manufacturing registered an increment of 0.4 percent in May 2023. This was faster than the 0.2 percent monthly growth rate recorded in April 2023. In May 2022, a monthly increase of 0.7 percent was observed in the PPI for manufacturing.  (Figure 3, and Tables A and 1)

The month-on-month increment of PPI for manufacturing in May 2023 was mainly contributed by the monthly increase in manufacture of computer, electronic and optical products at 2.4 percent during the period from 0.1 percent in April 2023. Completing the top three contributors to the monthly upturn of PPI for manufacturing during the period were the manufacture of food products with monthly growth of 0.1 percent from -0.1 percent monthly decline in April 2023; and manufacture of transport equipment with a monthly increase of 0.3 percent from -0.1 percent monthly decline in the previous month. These three industry divisions combined contributed 89.9 percent to the uptrend in the monthly growth rate of PPI for manufacturing in May 2023.

In addition, eight industry divisions registered monthly increments during the month. In contrast, nine industry divisions exhibited month-on-month declines in May 2023.

Meanwhile, manufacture of textiles and printing and reproduction of recorded media both recorded zero month-on-month rates.  (Tables C and 1)

2. Processing and preserving of fish, crustaceans and mollusks was the primary 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 monthly increase of 0.1 percent in May 2023, after posting a monthly decline of -0.1 percent in April 2023. In May 2022, the PPI for the manufacture of food products posted a higher monthly increment of 1.1 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 processing and preserving of fish, crustaceans and mollusks at 1.5 percent from a -0.3 percent monthly drop in April 2023; and manufacture of dairy products at 0.3 percent during the month from -0.5 percent monthly decline in the previous month.

Moreover, two industry groups of manufacture of food products exhibited higher monthly increases during the period relative to April 2023. In addition, slower negative monthly rates were observed in three industry groups of manufacture of food products in May 2023 compared with the previous month.

On the other hand, manufacture of other food products posted deceleration with 0.2 percent monthly increase during the month from 0.9 percent in April 2023. The manufacture of other food products includes bakery products, sugar, condiments, among others.  (Table 2)

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