PHL manufacturing output falls to five-month low in July — Nikkei

Philippine manufacturing output fell to its lowest level in five months in July due to the slow growth in booked orders, data released by Nikkei Inc. on Wednesday revealed.

The Manufacturing Purchasing Managers Index (PMI) was registered at 50.9 in July, down from the 52.9 in June. This is also the lowest since the 50.8 recorded in February.

The PMI is a composite single-figure indicator of manufacturing performance, with 50.0 as the threshold. A reading above 50 indicates growth, and a reading below 50 indicates a contraction.

"Nikkei PMI data pointed to a slowing of growth momentum for the Philippines manufacturing sector at the beginning of the second half of 2018, following a modest performance in the first half," said Bernard Aw, principal economist at IHS Markit, in a separate report.

"New business grew at a much slower rate in July after a solid second quarter, despite a strong pick up in export sales," he explained.

According to Aw, the recent slowdown in demand growth could pose doubts on the sector's recovery following the imposition of new excise taxes in the country.

"Slowing demand presents a worrying development and raises questions whether the recovery from the rollout of new excise taxes at the start of this year is losing steam," he said.

President Rodrigo Duterte in December signed TRAIN into law in December, which effectively expanded the value-added tax (VAT) base and reduced personal income taxes (PIT) starting this year. — BM, GMA News