PH factory output growth eases in August
Manufacturing output in the Philippines grew at the slowest pace in four months in August, largely because of slower growth in the production of food and electronic products as well as coke and refined petroleum, the Philippine Statistics Authority (PSA) reported on Tuesday
Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries (MISSI) showed that factory output, as measured by the volume of production index (VoPI), eased to 2.8 percent year-on-year in August.
This was slower than the 6.8 percent recorded in July and 5.6 percent in August last year.
The latest readout was also the slowest expansion in four months since the 1.4 percent in April.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the latest data to several factors including the “ghost month”, which is traditionally a time of decreased business activity as well as disruptions from recent typhoons.
“Additionally, weaker economic data from the US and China has contributed to slower exports and imports, affecting global trade,” Ricafort told Inquirer.
According to the statistics agency, the manufacture of food products grew by 0.6 percent, significantly slower from a double-digit increase of 13.1 percent in July. However, this was a turnaround from last year’s 4 percent contraction.
Other primary contributors to the growth included the manufacture of computer, electronic, and optical products, which grew by 4.2 percent, down from 13.2 percent the previous month.
This was followed by coke and refined petroleum products, which eased to 15.5 percent from 20.4 percent.
Of the 22 industries monitored by the PSA, six sectors noted declines, led by printing and reproduction of recorded media.
Meanwhile, S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 51.2 in August. A reading of over 50 marks improvement for the manufacturing sector and the opposite if below 50.
The PMI for August indicated that factory activity continued to experience sustained and modest gains in the third quarter, with an increase in output and new orders. Nonetheless, employment fell and buying activity cooled, indicating that manufacturers are wary of growth prospects, according to S&P.
Ricafort anticipates a seasonal uptick in manufacturing during the third quarter as businesses prepare for the increase, if not peak, in demand leading up to the Christmas holiday season.
He added that among the sectors that are likely to benefit in the seasonal effects are consumer products, such as food and beverage and noche buena products that benefit from increased holiday spending.
Meanwhile, the sector’s average capacity utilization, or the extent to which industry resources are used in manufacturing, averaged 75.5 percent in August, slightly lower than 75.7 percent in the previous month.
