Manufacturing output fell for the second month in a row in October, the Philippine Statistics Authority (PSA) reported on Friday.
Preliminary results from the PSA’s latest Monthly Integrated Survey of Selected Industries (MISSI) showed that factory output, as measured by the volume production index (VoPI), fell 1.8% year-on-year in October, compared with decline of 5% in September. This was a reversal from the 1.4% growth a year earlier.
On a monthly basis, the manufacturing VoPI rose 2.8%, a reversal from September’s 2.5% contraction. Excluding seasonal factors, output fell 0.4%, slower compared to last month’s 3.6% contraction.
From January through October, VoPI growth averaged 1.7%, up from 5.4% in the same period last year.
By comparison, S&P Global’s Philippine Purchasing Managers’ Index (PMI) for the manufacturing sector fell to 52.9 that month from 53.7 in September.
A PMI reading below 50 indicates a contraction in the manufacturing sector, while a PMI of 50 marks an expansion.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said VoPI has seen a slower decline due to bad weather, which lowered production dates due to the suspension of business days.
“The slower decline (in VoPI) was due to the typhoons entering the Philippines. There was work disruption in heavily affected areas. They could not work because the production and production facilities were closed,” Mr. Ricafort said in a telephone conversation.
The PSA attributed the slower decline in factory output growth in October to the beverage industry’s annual growth rate of 6.8%, compared with an annual decline of 8%. The beverage industry division is responsible for the fifth largest weight (6.7%) of total production, after coke and refined petroleum products (7.6%).
Production of timber, bamboo, sugar cane, rattan items and related products also contributed to the slower annual decline in VoPI in October, which rose 26.4% in October compared to the previous month’s decline of 24.3%, and transportation equipment (up 6.7%). % of 3.2%).
All 22 industrial divisions reported an occupancy rate of more than 60% in October.
The three most important industry categories for capacity utilization were machinery and equipment other than electricity (85.9%), other non-metallic mineral products (82.6%) and textiles (82.3%).
Mr Ricafort said there will be an upturn in the manufacturing sector in November and the rest of the year due to the Christmas period.
“There is a lot of demand for Christmas because people have income. These are the largest expenses for many people. There they get their bonus, and the overseas Filipino workers send money for Christmas expenses,” Mr. Ricafort said. — Charles Worren E. Laureta