A gauge of manufacturing activities in the Philippines climbed to a seven-month high in October, which augurs well for the fourth-quarter economic performance.
The S&P Global Manufacturing Purchasing Managers Index (PMI) increased month-on-month to 52.4, the fastest since March 2023.
PMI is a survey-based economic indicator designed to provide a timely insight into changing business conditions in the goods-producing sector.
The latest data was also higher than the previous month’s 50.6, but still slower than 52.6 a year ago. A PMI score above 50 represents growth or expansion within the manufacturing sector.
“Resuming the expansion mode that has been ongoing for nearly all months since September 2021 [except for contraction mode in August 2023 at 49.7], the Philippines defied the manufacturing PMI contraction mode [below 50] in other developed countries in recent months,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said in a report Friday.
He said further economic reopening narrative with the final lifting of the COVID public state of emergency since July 22, 2023 and further recovery in local and foreign tourism and new school year also supported the latest pickup in local business/economic activities, including the latest manufacturing PMI data.
“Better weather conditions in October 2023 and the end of the ghost month since mid-September 2023 also supported the pickup in manufacturing and overall business/economic activities in the country,” Ricafort said.
Ricfort said the manufacturing gauge could still improve further in the coming months, after President Ferdinand Marcos Jr. lifted the COVID-19 state of public health emergency throughout the country since July 22, 2023, leading to more manufacturing/production activities.
He said an offsetting factor would be the still relatively higher prices of some global commodities after Russia’s invasion/war with Ukraine since Feb. 24, 2022 or for more than a year already that sent global crude oil prices to near decade-highs at $82 per barrel levels for the Nymex crude oil price benchmark.
This led to higher inflation that could potentially slow down the economic recovery.