The country’s factory output posted a slower growth in December 2022 versus the previous month as well as the year ago level, data released by the Philippine Statistics Authority (PSA) showed.
According to the monthly integrated survey of selected industries, the volume of production index (VoPI) for manufacturing recorded a year-on-year increase of 4.8 percent in December 2022.
This is slower than the annual increase of 5.9 percent in the previous month, as well as December 2021’s growth rate of 19.2 percent.
The PSA said the slower annual growth of VoPI in December than its growth in November was mainly attributed to the slower year-on-year increase in the manufacture of transport equipment, which posted a decline of one percent from a growth of 14.3 percent; computer, electronic and optical products, 21.3 percent from 25.8 percent in the previous month; and basic metals, which posted a decline of 37.5 percent from a contraction of 29.2 percent in November 2022.
In addition to these three, slowdowns were also observed in the annual growth rates of the indices of eight industry divisions.
The Value of Production Index (VaPI) for manufacturing meanwhile posted a growth of 10.1 percent in December, which was also slower than the November annual growth of 12.5 percent. In December 2021, the VaPI accelerated annually at a rate of 19.6 percent.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in an emailed statement that the slowdown in the growth of factory output was partly due to the higher number of holidays that somewhat slowed down manufacturing activities during the month.
He also cited as well “higher prices, higher interest rates, risk of US recession that are drags on manufacturing and investment activities.”
“Mathematically, the slower growth in the MISSI manufacturing gauge especially versus a year ago may have to do also with the normalization of the base effects, after double-/triple-digit growth levels seen in earlier months, due to the much lower base effects in view of the large scale lockdowns from 2020-2021,” Ricafort said.
“Nonetheless, the modest, single-digit growth in the manufacturing volume production continued to pick up as the economy further reopened towards greater normalcy, with no large lockdowns so far in 2022 and no lockdowns going forward as a priority of the administration,” he added.
Ricafort also said that manufacturing VoPI for the full year 2022 posted a 15.2 percent growth year-on-year, slower than the 52.6 percent growth in 2021 amid lower base effects after a 40.5 percent contraction in 2020 at the peak of the pandemic lockdowns.
