Factory gate prices ease in August

Growth in factory gate prices eased in August as producer price increases in 10 commodity groups slowed, the Philippine Statistics Authority (PSA) reported yesterday.

The PSA said the Producer Price Index (PPI) for manufacturing contracted by 0.04 percent in August, slightly easing from the negative 0.4 percent growth in the same month last year. This was also slower than the revised annual growth of two percent in July.

Month-on-month, the PPI contracted by 0.1 percent in August compared with the negative 0.04 percent growth in July and 0.1 percent in August 2017.

PSA attributed the slowdown to price decreases in 10 major sectors: non-metallic mineral products, food manufacturing, chemical products, fabricated metal products, transport equipment, rubber and plastic products, furniture and fixtures, leather products, footwear and wearing apparel, as well as wood and wood products.

Price increases, however, were registered in the following commodities: petroleum products, tobacco products, electrical machinery, machinery except electrical, beverages, basic metals, miscellaneous manufactures, printing, textiles, as well as paper and paper products.

The Producer Price Survey for August had a response rate of 73.1 percent, corresponding to the retrieval of reports in 549 establishments out of the 751 samples for the survey.

This was lower than the response rate of 91.1 percent for the survey conducted in July.

Economic managers expect the growth in the prices of consumer goods to peak within this quarter and begin easing toward the end of the year and return to the upper end of the government target of four percent by next year.

Measures to curb inflationary pressures from the supply and demand side of the economy have so far been undertaken, beginning with the tightening of monetary policy to stem credit growth.

Upon recommendation of the Cabinet, President Duterte also issued an order removing non-tariff barriers to the importation of rice and other agricultural products and streamlining administrative procedures for accrediting importers in a bid to increase food supply and drive down prices.

On Thursday, the Bangko Sentral ng Pilipinas also raised interest rates anew by 50 basis points.