Local Producers’ Prices Up In April
On Thursday, the Philippine Statistics Authority (PSA) disclosed that the domestic producer prices in the manufacturing sector continued to rise in April, due to upticks in the selling prices of petroleum, tobacco, and beverages.
According to the PSA, the Producer Price Index (PPI) for manufacturing grew 0.5 percent in April 2018 from negative 0.7 percent in March and negative 1.7 in April last year. Additionally, the growth in the index has been consistent since January 2018.
Meanwhile, the prices of goods and services increased at a faster pace in April this year compared to the same month as last year. The rate was 4.5 percent in April this year compared to the 3.2 percent in 2017. The Banko Sentral ng Pilipinas (BSP) is expecting for the inflation in May to shoot up to a record 4.6 percent.
Note: The PPI measures the growth in the selling prices received by manufacturers and is an indicator of inflation trend in the economy like the consumer price index (CPI) which measures inflation from the perspective of the consumer.
The Nikkei Philippines Purchasing Managers’ Index (PMI) explains that the price hike was due to the inflationary pressures on producers as supply chains come under pressure.
In the report on the Nikkei Philippines Purchasing Managers’ Index (PMI) in April, IHS Markit said inflationary pressures remain a concern for producers as “supply chains come under pressure.”
Higher prices of fuel, industrial metal, sugar, and paper pull up average cost burdens. This is aggravated by the weak exchange rate. Because of this, firms implemented another round of price hikes to pass on the higher costs to customers.