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Philippine manufacturing posts modest growth in March


The Philippine manufacturing sector continued to expand in March, albeit at a slower pace than the previous month, according to results of the monthly survey conducted by IHS Markit.

The IHS Markit Philippines Manufacturing PMI fell to 52.2 in March from 52.5 in February.

The PMI is a composite indicator of the manufacturing sector's performance, with 50.0 as the threshold. A reading above 50 indicates growth while below 50 is a contraction.

"The Philippines manufacturing sector ended the first quarter on a positive note with a modest expansion recorded in March," IHS Markit Economist Shreeya Patel said in a commentary.

Goods producers reported a marginal rise in new order volumes for the month, while foreign client demand was subdued as restrictions linked to the COVID-19 pandemic persisted in overseas markets.

Locally, the Philippines reimposed the enhanced community quarantine (ECQ), the strictest possible restriction, in the NCR Plus Bubble from March 29. This was initially scheduled to last in Metro Manila, Cavite, Laguna, Rizal, and Bulacan until April 4, but was extended for another week to April 11.

IHS said an overall rise in new work led local firms to increase their output at an accelerated pace, while some noted efforts to stockpile finished goods amid expectations of greater demand in the coming months.

"A key area of concern, however, continues to be rising price pressures. Material shortages were often blamed for the highest costs incurred by firms," said Patel.

"A sustained increase in client demand, however, allowed some firms to partially pass on rising expenses," she added.

The Philippine Statistics Authority (PSA) is scheduled to report March inflation data on Tuesday, April 6, 2021.

"Nevertheless, a strong first quarter places the sector in a good stead for a return to industrial production growth in 2021, with our current forecast expecting a 7.1% expansion," said Patel. —KBK, GMA News

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