The manufacturing industry accelerated in May from a year ago, as the economy further reopened from lockdowns imposed by the government to curb the spread of the COVID-19 pandemic, data from the Philippine Statistics Authority show.
Results of the PSA’s Monthly Integrated Survey of Selected Industries showed that the volume of production index surged 265 percent in May, faster than the 155.6-percent increase registered in April. In contrast, the VoPI sank 73.2 percent in May last year.
“The expansion in VoPI for manufacturing sector in May 2021 were observed in 18 out of the 22 industry divisions. The fastest growth was registered in manufacture of coke and refined petroleum products at 1,366.1 percent. On the contrary, four industry divisions recorded decrements with manufacture of tobacco products registering the fastest annual decline of -68.7 percent,” the PSA said.
The value of production index for manufacturing also accelerated by 249.5 percent in May from a year earlier, faster than the 145.5-percent rise in April.
“The year-on-year growth rate in May 2021 was the second positive growth since April 2019 and the highest annual growth in the 2018-based data series. In May 2020, VaPI dropped at an annual rate of -74.4 percent,” the PSA said.
The upward trend in VaPI in May was brought about by the sharp increases in most of the 18 industry divisions that registered positive annual growth rates.
The top contributor was manufacture of coke and refined petroleum products with 1,472.7-percent annual growth. Only four industry divisions contracted, led by manufacture of tobacco products at -69.3 percent.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said in a report that the faster triple-digit year-on-year growth in manufacturing was magnified by the further re-opening of the economy from lockdowns, as the NCR Plus’ quarantine classification eased to GCQ with conditions since May 15, 2021.
He said it was also on top of the low base/denominator a year ago in May 2020, at the tail-end of the 2.5-month hard lockdowns back then with some restrictions on public transportation that
reduced or even shut down the production and sales of some manufacturing firms/industries last year.
“Thus, quantitatively, any year-on-year growth in manufacturing becomes massive/magnified amid measures to further re-open the economy from lockdowns,” Ricafort said.
He said the sharp year-on-year growth in manufacturing was also consistent with the recent high double-digit to triple-digit growth in exports and imports, largely brought about by the low base/denominator a year ago.
“Going forward, the massive year-on-year growth in manufacturing could still continue shortly after May 2021, even until July-August 2021, when the base/denominator would remain low, near the lowest/bottom since the pandemic started,” he said.
He said the growth could start to taper off starting September 2021 as the “low base/denominator fades/fizzles out and the denominator/base starts to rise sharply by then, resulting in slower year-on-year growth by then, as economies globally and locally re-started/re-opened since June 2020.”
The value of net sales index posted a slower annual increase of 55.6 percent in May. “The increment in VaNSI was brought about by the positive growth rates of 20 industry divisions, eight of which posted three-digit annual growth rates, led by manufacture of wearing apparel with 208.3 percent,” the PSA said.