Factory-gate price growth inched up in July, bucking the continued easing in headline inflation, as higher petroleum and electronics prices offset slower increases in food manufacturing prices.

The latest preliminary Philippine Statistics Authority (PSA) data released on Friday, Aug. 28, showed that the producer price index (PPI) for manufacturing rose by 2.983 percent year-on-year in July, slightly faster than the revised 2.98-percent growth in June.

Producer prices had declined by 0.1 percent in July last year, while the average year-on-year PPI growth rate in the first seven months of 2026 stood at 2.4 percent.

The slight pickup in factory-gate price growth contrasted with the continued downtrend in headline inflation, which eased to 6.2 percent in July from 6.4 percent in June, 6.8 percent in May and the more-than-three-year high of 7.2 percent in April as the war in the Middle East dragged on.

Despite easing for three consecutive months, inflation remained well above the government’s two- to four-percent target range.

While consumer inflation measures changes in the prices households pay for goods and services, PPI tracks changes in the prices manufacturers receive for goods at the factory gate.

Factory-gate prices can provide an indication of underlying cost pressures in the production chain, as sustained increases in manufacturers’ prices can eventually feed into consumer prices when higher costs are passed on to buyers.

On a month-on-month basis, the seasonally adjusted PPI for manufacturing rose by 0.1 percent in July, reversing a 0.1-percent decline in June.

The PSA attributed the slight acceleration in annual factory-gate price growth mainly to coke and refined petroleum products, whose PPI growth accelerated to 2.4 percent in July from 1.3 percent in June.

The industry division accounted for 68.6 percent of the increase in the annual growth rate of manufacturing PPI during the month.

Price growth for computer, electronic and optical products also accelerated to 5.8 percent from 5.6 percent, while other manufacturing and repair and installation of machinery and equipment posted faster growth of 3.2 percent from 2.4 percent.

Overall, the manufacture of computer, electronic and optical products was the biggest contributor to the annual growth in factory-gate prices, followed by basic metals and transport equipment.

Of the 22 manufacturing industry divisions monitored by the PSA, 20 posted annual price increases in July, while two recorded declines.

Food manufacturing, however, moved in the opposite direction, with its PPI growth slowing to 1.3 percent in July from 1.7 percent in June. The rate nevertheless remained higher than the 0.7-percent increase recorded a year ago.

On a seasonally adjusted month-on-month basis, food manufacturing prices declined by 0.2 percent in July, reversing a 0.3-percent increase in June.

The PSA attributed the slowdown in annual food manufacturing PPI growth to slower price increases in five of the eight industry groups, led by prepared animal feeds, whose growth dropped to 0.9 percent in July from 2.3 percent in June.

The slowdown was partly offset by faster increases in processing and preserving of meat, which accelerated to 1.3 percent from 1.1 percent; processing and preserving of fish, crustaceans and mollusks, to 4.6 percent from 4.1 percent; and manufacture of dairy products, to 5.4 percent from 5.2 percent.

Manufacturing producer-price growth had accelerated from 0.9 percent in January to 1.2 percent in February, 2.6 percent in March and 2.8 percent in April, before reaching 3.2 percent in May. - with a report from Danielle T. Bayani