Factory gate prices decline in 2024

MANILA, Philippines — Producer prices declined in 2024 compared to the previous year, mainly due to the slower growth in food prices, according to the Philippine Statistics Authority (PSA).

Preliminary data from the PSA showed that the average growth rate of the Producer Price Index (PPI) for manufacturing declined by 0.7 percent last year from a 1.4-percent increment in 2023.

PPI measures the change over time in the prices of products produced by domestic manufacturers and sold at factory gate prices to wholesalers and/or other consumers in the local market relative to a base period.

 “The downtrend in the annual average year-on-year growth rate of PPI in 2024 was mainly attributed to the deceleration in the annual average growth rate of PPI of manufacture of food products at 1.1 percent from an annual average increment of three percent in 2023,” the PSA said.

Apart from food products, the PSA said beverages also contributed to the downtrend in PPI as the industry division posted a slower average increase of 3.7 percent last year from an average increase of 9.4 percent in 2023.

Another major contributor to the downtrend was the fabricated metal products, except machinery and equipment industry division, which posted an average decline of 3.9 percent last year from an average increase of 3.5 percent in 2023.

In December 2024, the PPI posted slower growth of 0.2 percent from 0.4 percent in the previous month and 0.6 percent in December 2023.

The PSA cited food products as the main driver of the deceleration in PPI in December.

PPI growth for food products slowed to 1.7 percent in December 2024 from a 2.4-percent increase in November 2024.

“The slowdown in the annual growth rate of PPI for manufacture of food products in December 2024 was primarily attributed to the deceleration in the annual growth rate of the processing and preserving of fruits and vegetables industry group at 3.1 percent during the period from 7.4 percent annual increase in the previous month,” the PSA said.

The PSA cited basic metals as another key contributor to the PPI downtrend as growth in the industry division slowed to 1.5 percent in December last year from the previous month’s 3.2 percent.

Also driving the PPI downtrend was transport equipment, which posted slower growth of 1.1 percent in December last year from 2.1 percent in November 2024.

Of the remaining 19 industry divisions, 12 exhibited increases, while seven industry divisions registered decreases in December last year.

Industry divisions with positive growth rates in December last year are computer, electronic and optical products; beverages; coke and refined petroleum products; chemical and chemical products; machinery and equipment except electrical; other manufacturing and repair and installation of machinery and equipment; tobacco products; wearing apparel; printing and reproduction of recorded media; leather and related products, including footwear; basic pharmaceutical products and pharmaceutical preparations; and wood, bamboo, cane, rattan articles and related products.