Manufacturing Sector Sees Faster Annual Decline in Producer Prices for May 2024

The manufacturing sector saw an annual decline in producer prices in May 2024, according to the Philippine Statistics Authority (PSA).

The Producer Price Index (PPI) dropped by 0.8%, compared to a 0.6% decrease in April 2024. This decline contrasts sharply with the 2.2% increase observed in May 2023.

The primary driver of this downtrend was the manufacture of computer, electronic, and optical products, which saw its annual growth rate fall to 1.9% in May from 4.0% in April.

The manufacture of computer, electronic, and optical products alone accounted for 75.3% of the overall decline in the manufacturing PPI.

Among the 22 industry divisions, it holds the second highest weight in the PPI calculation.

Other notable contributors to the faster decline include the beverage manufacturing sector, which saw its growth rate slow to 3.4% from 4.1%, and the manufacture of other non-metallic mineral products, which experienced a faster decline of 2.6% from 1.8% in April.

Out of the 22 industry divisions, 10 reported annual decreases, while nine showed increases.

In contrast, some sectors contributed positively to the overall PPI. The top contributors to the growth rate were the manufacture of coke and refined petroleum products, fabricated metal products (excluding machinery and equipment), and other non-metallic mineral products.

The food manufacturing sector saw an acceleration in its PPI growth rate to 1.0% in May from 0.7% in April. This was largely driven by the manufacture of vegetable and animal oils and fats, which increased from 1.4% to 2.6%.

Other contributors included the processing and preserving of fruits and vegetables, grain mill products, and other food products.

However, there were declines in some food-related sectors, including processing and preserving meat, fish, crustaceans and mollusks, dairy products, and prepared animal feeds. (ASC)