Factory gate prices accelerated further in May, bucking the easing in consumer inflation as higher manufacturing costs reached their fastest pace in more than three years, driven mainly by the electronics industry.

The latest preliminary Philippine Statistics Authority (PSA) data on Tuesday, June 30, showed that the producer price index (PPI) for manufacturing rose by 2.9 percent year-on-year in May from the revised 2.6 percent last April. In May last year, factory gate prices declined by 0.3 percent year-on-year.

Historical data available through the PSA’s OpenSTAT database showed that the May reading was the highest since the identical 2.9-percent growth recorded in March 2023 but lower than the 3.9 percent in February 2023.

The acceleration in factory gate prices contrasted with the trend in the consumer price index (CPI), as headline inflation eased to 6.8 percent last May from the more-than-three-year high of 7.2 percent in April.

The latest PPI reading also extended the steady uptrend in factory gate inflation that since February’s 1.17 percent.

The PSA attributed the faster annual increase in factory gate prices mainly to the manufacture of computer, electronic, and optical products, whose producer price growth accelerated to 5.9 percent last May from 4.4 percent last April. The industry contributed 50.8 percent to the overall acceleration in manufacturing PPI and carries the second-highest weight in the index’s computation.

Other major contributors to the faster increase were the manufacture of basic metals, whose producer prices rose by 5.4 percent from 3.8 percent, as well as the manufacture of chemicals and chemical products, which accelerated to 3.9 percent from 3.2 percent.

Overall, 16 of the 22 manufacturing industry divisions recorded annual price increases in May, while three posted annual declines.

The PSA also identified the manufacture of computer, electronic, and optical products, manufacture of basic metals, as well as manufacture of coke and refined petroleum products as the three largest contributors to the overall annual increase in manufacturing producer prices.

Meanwhile, producer price growth for food manufacturing slowed to 1.3 percent in May from 1.5 percent in April, mainly due to the wider annual decline in producer prices for the manufacture of vegetable and animal oils and fats, which fell by 4.9 percent from 3.5 percent last April.

Partly offsetting the slowdown were faster producer price increases for the processing and preserving of fish, crustaceans, and mollusks, which rose by 4.4 percent from 2.8 percent, as well as the manufacture of other food products, which edged up to 0.2 percent from 0.1 percent. Producer prices for grain mill products, starches, and starch products also returned to positive territory, posting a 0.1-percent increase after a 0.2-percent decline in April.