April factory output rises by 8.2% on solid demand
MANUFACTURING OUTPUT in the Philippines rose to a three-month high in April amid strong domestic demand.
Factory output, as measured by the volume of production index (VoPI), went up by 8.2% year on year, data from the local statistics agency released on Thursday showed.
This was higher than 3.4% in March. The output fell by 1.3% a year earlier.
The VoPI fell by 8.9% in April from a month earlier. Stripping out seasonality factors, production volume rose by 2.9% month on month after a 1.1% decline in March. To date, factory output has risen by 6.7%, slower than 49.2% a year earlier.
S&P Global’s Philippine Manufacturing Purchasing Managers’ Index (PMI) eased to an eight-month low of 51.4 in April. A reading above 50 signals improvement, while anything below 50 shows the opposite.
Robert Dan J. Roces, chief economist at Security Bank Corp., attributed the manufacturing output expansion to a strong domestic demand that increased production, recovering exports and public investments in infrastructure.
In an e-mail, he also said the April results would contribute to economic growth this quarter given manufacturing’s big share in economic output.
The Philippines grew by 6.4% in the first quarter, the slowest in two years though it was within the government’s 6-7% target.
The manufacturing sector contributes about a fifth to the economy.
In the report, the Philippine Statistics Authority said the top three contributors to April’s growth were the heavily weighted food products at 14.7%, transport equipment at 38% and other nonmetallic mineral products at 15.7%.
Other sectors that posted increases that month were basic metals at 29.3%; coke and refined petroleum products at 15.3%; other manufacturing and repair and installation of machinery and equipment at 27.1%; printing and reproduction of media at 50.5%; and wood, bamboo, cane, rattan articles and related products at 16.9%.
Mr. Roces said manufacturing output likely continued to improve in May. “The factors that contributed to the growth in April remain in place, and no major disruptions are expected in terms job creation and consumption patterns.”
Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said while inflation driven by rising oil prices and geopolitical issues could affect manufacturing growth, output growth would likely continue in the coming months.
“Slowly but surely, the improvement of our output will continue,” he said in Filipino. — T.C.S. Migriño