The country’s factory output saw a significantly slower growth in October, the Philippine Statistics Authority (PSA) reported yesterday.
According to the latest Monthly Integrated Survey of Selected Industries, the Volume of Production Index in October slowed down to 1.7 percent from 6.7 percent a year ago and 9.9 percent in the previous month.
Likewise, the Value of Production Index eased to a growth of 1.3 percent from 14.5 percent in October 2022 and 9.6 percent in September 2023.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in a statement the slower manufacturing figures may have been weighed by continued pick up in prices though at a slower pace, still leading to higher input costs of manufacturers, as the Israel-Hamas conflict led to a temporary increase in global crude oil and other commodity prices.
“Manufacturing (was) also partly weighed by higher… interest rates that increased borrowing costs of manufacturers, thereby a drag on new investments and expansion projects of some manufacturers,” Ricafort said.
“The seasonal increase in manufacturing activities in the third quarter in preparation for the seasonal increase, if not, the peak in sales for many businesses locally and for the global markets, could have tapered off already in October 2023,” he added.
Based on responding establishments, the average capacity utilization rate for the manufacturing section in October 2023 was reported at 74.3 percent from 74.4 percent in the previous month.
The proportion of establishments that operated at full capacity (90 percent to 100 percent) was 27.1 percent of the total number of responding establishments.
Meanwhile, 38.8 percent operated at 70 to 89 percent capacity, and 34.1 percent operated below 70 percent capacity. – Angela Celis
