Factory gate prices stall in October as electronics sector pulls back
Factory-gate prices stalled in October, edging up by less than half a percent year-on-year as some manufacturing sectors, particularly electronics, dampened overall growth, the Philippine Statistics Authority (PSA) reported.
PSA’s latest monthly survey of manufacturers showed the Producer Price Index (PPI) rose just 0.3 percent from a year earlier, while month-on-month it grew 0.4 percent.
Although October’s PPI posted slight growth, it slowed from September’s 0.8 percent year-on-year increase.
PPI measures the average change in factory gate prices over time.
The benign factory gate prices were mostly due to the computer, electronic and optical products sector, which saw its PPI drop 1.0 percent in October, a sharp reversal from a 0.6-percent annual rise in September.
The industry accounted for more than half of the slow growth, or 56 percent, in overall manufacturing prices.
Growth in other manufacturing sectors also slowed in October.
Food products rose just 0.4 percent year-on-year, down from 0.7 percent in September, mainly due to the deceleration in the manufacture of vegetable and animal oils.
Basic metals also increased 1.4 percent, but were weaker than the preceding month’s 2.2 percent gain.
Inflation
Month on month, the PPI rose faster than the 0.1-percent increase recorded in September. The acceleration was driven mainly by the rebound in coke and refined petroleum, which swung to a 1.0 percent gain from a 1.9 percent drop in the preceding month.
Transport equipment and computer, electronic and optical products also posted faster increases—up 0.8 percent and 0.9 percent, respectively—together accounting for more than 90 percent of the sector’s overall monthly acceleration.
The muted movement in factory gate prices comes as October headline inflation also held steady at 1.7 percent.
PSA is set to release the November inflation report on Dec. 5. The Bangko Sentral ng Pilipinas (BSP) expects the figure to land between 1.1 percent and 1.9 percent—still below the official 2- to 4-percent target range for the ninth straight month, but slightly faster than October’s benign print. Economists polled by the Inquirer last week, meanwhile, forecast November inflation at 1.6 percent.
