The country’s factory output grew at a faster rate of 8.2 percent in April, the Philippine Statistics Authority (PSA) reported yesterday.
According to the PSA’s Monthly Integrated Survey of Selected Industries, the Volume of Production Index in April is faster than the 3.4 percent increase recorded in the previous month, and a reversal of the 1.3 percent contraction in the same month last year.
“The latest pick up in the latest manufacturing data (is) partly due to lower prices or easing inflation trend, amid the decline in most of the major global commodities prices such as crude oil among 17-month lows, natural gas among 2.5-year lows, coal near 2-year lows; also the decline in the world prices of industrial metals and other inputs used by local manufacturers,” Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in an emailed statement.
Ricafort also cited various factors such as better weather conditions which helped increase agricultural production; the downward correction in long-term interest rates which helped reduce the long-term borrowing costs of manufacturers; the seasonal increase in economic activities during the Holy Week holidays; further reopening of the economy towards greater normalcy; increased government spending; reduction of individual income tax rates; and the economic reopening narrative of China.
“For the coming months, further easing of inflation and eventually easing of interest rates would also support faster pick up in the local economy, including local manufacturing output and sales,” Ricafort said.
Meanwhile, the Value of Production Index for manufacturing continued to increase by 10.7 percent in April 2023, also faster than the March 2023 annual growth of 6 percent. In April 2022, it likewise recorded an annual growth rate of 5 percent.
The PSA said based on responding establishments, the average capacity utilization rate for the manufacturing sector in April 2023 was reported at 72.4 percent.
The proportion of establishments that operated at full capacity (90 to 100 percent) was 24 percent of the total number of responding establishments. Meanwhile, 37.9 percent operated at 70 to 89 percent capacity, while 38.1 percent operated below 70 percent capacity.
