Trade Secretary Ramon Lopez on Wednesday described the decline in the country’s purchasing managers’ index to 48.5 percent in October from 50.1 in September as a “marginal drop”.
“The slight decline in the Philippine manufacturing PMI merely reflects a pause in our economy’s recovery momentum. It just shows that we are still in an adjustment period, with marginal ups and downs, but essentially the general slope is upward,” Lopez said.
He said the Philippine government believed that the economy was generally on the path to recovery, although overall demand remained subdued compared to pre-pandemic levels as some jobs were just starting to be recovered.
A 50.0 index is a neutral mark in manufacturing output with any score above signifying an improvement of activity.
“We have observed lesser business closures but we recognize that there are still reduced staffing levels. As such, this still affects consumer confidence, but situation is getting better as we ease up the restrictions,” Lopez said.
He said market demand was still subdued because not all consumers regained their capacity. Restrictions were still up for minors 15 years old and below and the elderly from 65 years and up. Mass gatherings were still prohibited as well as other segments of tourism.
Lopez assured that the government was doubling its efforts in rebuilding the economy, working together with the private sector to stay relevant, recover and thrive in a post-pandemic recovery.
Efforts to assist businesses, COVID-proof their operations and ensure strict implementation of health standards in establishments to boost consumer confidence and generate more consumer spending were part of the ongoing recovery strategy of the DTI, he said.
Lopez said several investment policies were liberalized to incentivize the implementation of COVID-proofing activities and the production of critical goods and services that are needed in the fight against COVID-19.
“Given these health measures, we are more confident in further opening up the economy without undermining our efforts to contain the spread of COVID-19,” he said.
The PMI is a survey-based economic indicator designed to provide a timely insight on business conditions. It is widely used to anticipate changing economic trends in official data such as GDP or sometimes as an alternative gauge of economic performance and business conditions to official data, as the latter sometimes suffer from delays in publication, poor availability or data quality issues.
The PMI is produced globally by IHS Markit although a small number of trade associations also produce local PMIs in certain markets.