The manufacturing sector began to show an improvement in April and May, based on the results of two surveys, the Board of Investments said Thursday.
Results of the monthly integrated survey of selected industries conducted by the Philippine Statistics Authority showed the volume of production index rebounded 162.1 percent year-on-year in April from the 73.3-percent decline in March.
IHS Markit also reported that purchasing managers’ index reached 49.9 in May, up from 49.0 in April, indicating a swift movement towards stabilization with some businesses already resuming operations.
“We welcome these encouraging developments. Our capacity utilization inched up to 63.6 percent in April from 63 percent the previous month. This shows a huge increase and we see a continuing increase in the months ahead,” said Trade Secretary and BOI chairman Ramon Lopez.
“This was because of the more permissive quarantine restrictions we implemented this year as we gradually reopen the economy. Even under the Enhanced Community Quarantine in March and Modified ECQ in April of this year, there was a higher operating capacity for manufacturing and exports. Despite the restrictions, we kept the economy moving and limited the lockdowns to the non-essential sectors,” he said.
Data from the PSA showed that 20 of the 22 industries posted increases in production volume for April, with basic metals posting the fasting growth of 687.5 percent and only the refined petroleum products and pharmaceuticals recording declines.
“The value of production index also posted YoY growth of 154.3 percent for April, which was the first positive growth since April 2019 and is the highest annual increase in the 2018-based data series,” the PSA said, in contrast to the VAPI values of 74.2 percent in March 2021 and 66.6 percent in April last year.
IHS Markit said that despite a soft decline in orders for May, there were signs that the overall picture in terms of product demand was already improving with declines easing at marginal figures.
Orders from foreign markets continued to rise significantly amid the relaxing of restrictions globally as other countries accelerated their vaccination, according to HIS Markit.
It said companies, in anticipation of robust demand in the coming months, already mitigated delays with inventory adding up in May as the pre-and post-production inventories were already stable.
“We hope to sustain the increase of production capacity as we keep the process of a calibrated and safe reopening of businesses, especially now that the vaccine rollout is accelerating its pace with more vaccines coming this month. And with the expanded definition of the A4 priority group, the vaccination of our workers will keep the economy running,” Lopez said.