Manufacturing PPI growth slows to 0.3% in Oct.

PRICE GROWTH at the factory gate slowed in October, with computer, electronic and optical products dragging down the overall index, the Philippine Statistics Authority (PSA) reported.

The PSA said the Producer Price Index (PPI) for manufacturing grew 0.3% year on year in October, decelerating from the 0.8% rate posted in September. The October growth represented a turnaround from the 0.4% decline posted a year earlier.

“The slower annual increase of PPI for the manufacturing section in October was primarily due to the annual decline in the PPI for the manufacture of computer, electronic and optical products industry division,” the PSA said in a statement on Tuesday.

The PPI for the manufacture of computers, electronics, and optical products industry division slipped 1% in October after having risen 0.6% in September.

“Among the 22 industry divisions for manufacturing, the manufacture of computer, electronic and optical products has the second-highest weight in the computation of PPI,” it added.

Other contributors to the decline were the price growth slowdowns in food products to 0.4% from 0.7% and in basic metals to 1.4% from 2.2%.

“Of the remaining 19 industry divisions, 12 exhibited annual increases, while seven industry divisions registered annual decreases during the period,” the PSA said.

Month on month, the PPI for manufacturing grew 0.4% in October, accelerating from 0.1% in September but slower than the 0.9% year-earlier rise.

“The top contributor to the faster monthly growth rate of PPI for manufacturing in October was the manufacture of coke and refined petroleum, which registered a monthly increment of 1% during the period from a 1.9% monthly decline in September,” it said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slower PPI increase could be attributed to better weather compared to previous months.

He said that the series of storms and earthquakes since July “partly led to a temporary increase in prices amid damage and reduction in the supply of some agricultural products.”

“For the coming months, prices could seasonally pick up during the Christmas holiday season,” he said via Viber.

He cited “higher demand/spending by consumers” though declines are expected “upon crossing the new year.”

Meanwhile, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said slower price growth in October reflects easing cost pressures for manufacturers.

“Food prices cooled as supply improved, and global commodity prices — especially energy — stabilized after earlier spikes,” he said via Viber.

“Manufacturers are getting some breathing room, but risks remain from volatile electricity costs and imported raw materials. If oil or supply chain shocks return, PPI could climb again,” he added.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the moderation in PPI growth reflects stabilized global commodity prices, smoother supply chains, and softer domestic demand.

“Some industries are also adjusting from earlier high-cost periods and are now seeing more normal input prices,” he said via Viber.

“Overall, slower PPI growth reflects a cooling of cost-push pressures, consistent with the broader slowdown in manufacturing activity,” he added. — Justine Irish DP. Tabile