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Philippine manufacturing highest in over 3 years –IHS Markit February survey

Philippine manufacturing saw an improvement to its highest level in over three years, marking the resumption of growth of the sector, results of the monthly survey conducted by IHS Markit released on Tuesday showed.

The IHS Markit Philippines Manufacturing PMI or Purchasing Managers’ Index - an indicator of economic activity in the manufacturing sector - rose from 50.0 in January to 52.8 in February, its highest since December 2018.

The PMI considers new orders, output, employment, suppliers' delivery time, and stocks.

Readings above 50 signal growth while below that is a contraction.

“February data revealed a return to growth for the Philippines manufacturing sector with the PMI rising to the highest for over three years. There were many key takeaways from the latest data but central to the improvement were solid expansions in both output and new orders,” IHS Markit economist Shreeya Patel said in an accompanying commentary.

"While the relaxation of restrictions was no doubt the latest driver of growth, there were also tentative signs of improvements in material availability, as delivery times lengthened to the least marked extent for a year. Purchasing activity expanded at the sharpest rate for over three years while firms were able to boost both pre- and post-production inventories sharply,” Patel added.

IHS Markit reported that firms mentioned that the relaxations of some pandemic restrictions and wider material availability prompted the increase in production.

New orders, meanwhile, rose sharply with panel comments overwhelmingly mentioning improvements in the domestic demand environment.

Exports also rose during the month, bringing an end to four successive months of contraction.

To support output growth, manufacturers raised their buying activity in February, according to IHS Markit.

In a separate statement, Trade Secretary Ramon Lopez attributed the growth in the country’s manufacturing output to the continued easing of economic restrictions amid the challenges of the COVID-19 pandemic.

“The climb in the country’s PMI in February is a result of the consistent and sustained efforts, together with the continued cooperation of our countrymen, in working towards the recovery of our economy. Last month’s performance is an indication of the sector’s solid growth in output, new orders, and exports thanks to easing of mobility curbs as the Omicron surge fades,” Lopez said.

“Even before we shifted to Alert Level 2, we have allowed 100% operating capacity for all manufacturing, and all exports activities. Thus, with the recent de-escalation of Metro Manila and other provinces to Alert Level 1, we expect March PMI to remain above 50 on sustained manufacturing growth recovery, underpinned by economic reopening and greater mobility,” he added. — DVM, GMA News