PH factory gate prices rose 0.8% in February
Factory gate prices continued to rise in February, driven by the uptick in the selling prices of coke and refined petroleum products manufacturers.
Data released by the Philippine Statistics Authority (PSA) on Wednesday showed that the Producer Price Index (PPI) for the manufacturing sector had posted a slightly faster annual increase of 0.8 percent in February, from 0.7 percent in January.
This marks a reversal from February 2024, when the PPI saw an annual decline of 1.4 percent.
PPI is a measure of the average change over time in the selling prices received by domestic producers for their output, serving as an important indicator of inflationary trends at the wholesale level.
“Among the 22 industry divisions for manufacturing, manufacture of coke and refined petroleum products has the fourth-highest weight in the computation of PPI,” the PSA said in a statement on Wednesday.
The slight increase in prices was recorded despite indications that manufacturing output in the country had moderated in February.
The manufacture of transport equipment saw a slower decline of 0.01 percent in February compared with a 0.7-percent annual decrease in January.
Similarly, the manufacture of other non-metallic mineral products posted a 1.7-percent decline in February, an improvement from the 3.4 percent annual decrease in the previous month.
The country’s latest PPI figure indicated a modest but continued recovery in the manufacturing sector, driven largely by the petroleum and transport equipment industries.
Meanwhile, Market intelligence firm S&P Global Manufacturing reported that the country’s manufacturing output contracted at the end of the first quarter of this year, following 18 consecutive months of growth.
“Companies scaled back output due to a fresh fall in new business. Foreign client demand also faltered, with the previous three-month period of growth ending in March,” it said in its latest report.
“Hiring activity was paused, with firms citing sufficient manpower to meet business requirements,” it added.
The company’s Philippines Manufacturing PMI, a key indicator used to assess manufacturing performance, dropped below the neutral 50 level for the first time in 19 months in March.
The index recorded a value of 49.4, down from 51 in February, marking the third consecutive month of decline.
This is only the second time in over three and a half years that the PMI had fallen below 50, the threshold that separates growth from contraction.
The decline in March was the most significant seen since August 2021.
