The country’s manufacturing output registered a two percent year-on-year growth in December 2023, according to the Philippine Statistics Authority.
While faster than the 1.8 percent increase in the previous month, the latest figure is lower than the 4.5 percent expansion recorded in the same period a year ago.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the slower manufacturing may have been weighed by the continued pickup in prices though at a slower pace, still leading to higher input costs of manufacturers.
It is also consistent with the new eight-month lows for both exports and imports, Ricafort said, amid the slowdown in global trade, investments and other economic activities after the aggressive interest rate hikes since 2022.
“Manufacturing also partly weighed by still relatively higher… interest rates that increased financing costs, especially short-term tenors, of manufacturers, thereby still a drag on new investments and expansion projects of some manufacturers,” Ricafort said.
Meanwhile, the Value or Production Index (VaPI) for manufacturing also saw an increase of 2.6 percent in December 2023.
This was faster compared with its annual growth rate of two percent in the previous month, but slower than the double-digit annual increase of 10.1 percent in the same period a year ago.
“It is important to note that manufacturing capacity utilization as of December 2023 is still among five-year highs at 74.3 percent,” Ricafort said.
The proportion of establishments that operated at full capacity (90 to 100 percent) was 27.4 percent of the total number of responding establishments.
Meanwhile, 39.4 percent operated at 70 to 89 percent capacity, and 33.2 percent operated below 70 percent capacity.
