Manufacturing output grew by more than 500 percent for the second straight month in August, as the government allowed factories to continue production despite community quarantine restrictions.
Data from the Philippine Statistics Authority showed the volume of production index jumped 534.6 percent in August, following a 539.7-percent rise in July. The VoPI in August last year plunged 82.2 percent at the height of lockdown.
“Sixteen industry divisions contributed to the positive growth of VoPI in August 2021, of which the fastest growth was reported in manufacture of coke and refined petroleum products at 3,800.9 percent,” the PSA said.
Six industry divisions recorded decrements with manufacture of tobacco products registering the fastest annual decline of 53.8 percent.
The value of production index for manufacturing showed an annual increment of 523.3 percent in August.
“This was the second highest annual growth rate in the 2018-based data series of VaPI after hitting its highest annual increase in the previous month at 528.7 percent,” the PSA said. The VaPI slid 83.1 percent in August 2020.
“The significant expansion in VaPI for manufacturing sector in August 2021 was due to the increases in 14 out of 22 industry divisions. The fastest growth rate was reported in manufacture of coke and refined petroleum products at 4,388.7 percent. The remaining eight industry divisions recorded decreases, with manufacture of tobacco products registering the fastest annual decline of -53.8 percent,” the PSA said.
The value of net sales index recorded a year-on-year increase of 6.5 percent in August, from a lower annual growth rate of 1.5 percent in the previous month. In August 2020, VaNSI dropped 18.8 percent.
The PSA said the average capacity utilization rate for the manufacturing sector eased to 66.1 percent in August from 66.8 percent in July. Nineteen of the 22 industry divisions registered more than 50-percent average capacity utilization rate, led by manufacture of furniture (83.1 percent), manufacture of tobacco products (81.6 percent) and manufacture of other non-metallic mineral products (79.3 percent).
The proportion of establishments that operated at full capacity (90 percent to 100 percent) was 22.2 percent of the total number of responding establishments. Meanwhile, 36.6 percent operated at 70 to 89 percent capacity, while 41.2 percent operated below 70 percent capacity.
Meanwhile, the Asean+3 Macroeconomic Research Office on Thursday reduced its 2021 growth forecast for the Philippines to 4.3 percent from the previous assumption of 6.9 percent. In its Regional Economic Outlook Update for October 2021, AMRO also cut the growth forecast for 2022 to 6.7 percent from 7.8 percent.
The forecast for the Philippines this year is the second fastest in the ASEAN region, next to Singapore’s 6.3 percent. It is followed by Malaysia, with 4.1 percent; Indonesia, 3.8 percent; Laos, 2.9 percent; Cambodia, 2.8 percent; Vietnam, 2.6 percent; Brunei Darussalam, 2.1 percent; and Thailand, 0.8 percent. Myanmar is seen to post the biggest GDP decline of 18.7 percent this year.
AMRO said the strong rebound in ASEAN+3 exports that began in late 2020 held up well in the first half of 2021, but subsequently softened.
“The region’s total export volume rose sharply by at least 30 percent in year-over-year terms, between February and April 2021, buoyed by solid export performances in China, Hong Kong, Malaysia, the Philippines and Vietnam, and the sturdy global demand for electronics, computers and parts, as well as automobiles,” AMRO said.
“However, this momentum had started to wane in May, as the Delta variant triggered fresh restrictions across the region,” it said.
Economic activity in the region is now projected to expand by an aggregate 6.1 percent in 2021, down from the 6.7 percent forecast earlier this year, after posting a flat growth in 2020.
