2. Manufacture of prepared animal feeds 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 5.2 percent in March 2023. This was slower compared with the February 2023 and March 2022 annual growth rates of 6.1 percent and 7.6 percent, respectively.  (Figure 2, Tables 1 and 2)

The deceleration in the annual growth of the PPI for manufacture of food products in March 2023 from February 2023 was primarily attributed to the slower annual increase in the index of manufacture of prepared animal feeds industry group posting an annual increment of 11.2 percent in March 2023 from 13.9 percent in the past month. Slower annual growth rates were also noted in the indices of four industry groups of manufacture of food products.

Moreover, contributing to the slower annual growth of PPI for manufacture of food products were the faster annual declines in the producer prices of manufacture of vegetable and animal oils and fats; and processing and preserving of fruits and vegetables at -4.6 percent and -2.4 percent, respectively, compared with their respective annual decreases in the previous month.

On the contrary, processing and preserving of fish, crustaceans and mollusks was the only industry group that registered higher annual growth rate in March 2023 at 12.7 percent from 11.7 percent annual increase in February 2023.  (Table 2)

B.  Month-on-Month Growth for March 2023

3. Manufacture of other non-metallic mineral products was the main contributor to the slowdown in the monthly decline of producer price index for manufacturing

Month-on-month, the PPI for manufacturing posted a decrement of -0.02 percent in March 2023, after exhibiting a -0.1 percent monthly growth rate in February 2023. In March 2022, a monthly increase of 0.9 percent was observed.  (Figure 3, and Tables A and 1)

The slower monthly decrement of PPI in March 2023 was mainly contributed by the lower monthly growth rate of manufacture of other non-metallic mineral products at -0.005 percent during the period from -1.5 percent monthly decrease in February 2023. Completing the top three contributors to the slower monthly decrement for manufacturing during the period were manufacture of transport equipment with monthly growth of 0.2 percent from -0.3 percent; and manufacture of coke and refined petroleum with a slower monthly decline of -0.9 percent from -1.6 percent. These three industry divisions contributed almost two-thirds or 64.3 percent to the slower downtrend in the monthly growth rate of PPI for manufacturing in March 2023.

Other contributors to the slower month-on-month decline of PPI in March 2023 were the following: 
a. Three industry divisions exhibited higher monthly growth rates during the period than in the previous month; 
b. Three industry divisions posted positive month-on-month growth rates during the period after registering monthly declines in the past month; and 
c. Three industry divisions registered slower monthly decreases in March 2023 than in February 2023.

On the other hand, there were four industry divisions that showed monthly declines in March 2023 from positive monthly growth rates in the previous month. Two industry divisions recorded faster monthly drops during the period than in February 2023, and another two industry divisions with slower positive monthly growth rates in March 2023.

Meanwhile, the industry divisions of manufacture of textiles; and printing and reproduction of recorded media posted zero month-on-month rate.  (Tables C and 1)

4. Manufacture of prepared animal feeds was the primary contributor to the slower monthly increase in the producer price for food manufacturing

Month-on-month, the PPI for the manufacture of food products posted a slower monthly increase of 0.1 percent in March 2023 compared with 0.4 percent in the previous month. In March 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 slower monthly increase in the PPI for food manufacturing during the period was brought about by the decline in the index of manufacture of prepared animal feeds industry group posting -0.7 percent during the period from a month-on-month increment of 1.6 percent in February 2023. In addition, two industry groups recorded monthly drops in March 2023 after registering upturns in the past month. Moreover, slowdowns were observed in the indices of processing and preserving of fish, crustaceans and mollusks at 0.4 percent from 2.3 percent; and manufacture of dairy products at 0.3 percent from 0.9 percent.

On the other hand, the index of manufacture of grain mill products, starches and starch products recorded a slower negative monthly rate of -0.1 percent in March 2023, while the index of manufacture of vegetable and animal oils and fats posted a positive month-on-month growth rate at 0.8 percent in March 2023 after registering a monthly decline in the previous month.

Lastly, there is no change in the PPI of processing and preserving of meat from February 2023 to March 2023.  (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