A new method for deriving pulse rate from PPG obtained from ambulatory patients is presented. The method employs Ensemble Empirical Mode Decomposition to identify the pulsatile component from noise-corrupted PPG, and then uses a set of physiologically-relevant rules followed by adaptive thresholding, in order to estimate the pulse rate in the presence of noise. The method was optimized and validated using 63 hours of data obtained from ambulatory hospital patients. The F1 score obtained with respect to expertly annotated data was 0.857 and the mean absolute errors of estimated pulse rates with respect to heart rates obtained from ECG collected in parallel were 1.72 bpm for "good" quality PPG and 4.49 bpm for "bad" quality PPG. Both errors are within the clinically acceptable margin-of-error for pulse rate/heart rate measurements, showing the promise of the proposed approach for inclusion in next generation wearable sensors.