The growth of the country’s manufacturing output has significantly slowed down in April, the Philippine Statistics Authority (PSA) reported yesterday.
The Monthly Integrated Survey of Selected Industries (MISSI) showed that the Volume of Production Index (VoPI) posted a year-on-year growth rate of 3.4 percent in April 2022.
This annual rate, however, was slower than the 352.3 percent hike recorded in the previous month and the 157.8 percent increase in April 2021.
The PSA said the upturn in VoPI was brought about by the expansions in production of 14 industry divisions. Of these, manufacture of textiles was the major contributing factor with 45.6 percent annual growth rate.
Meanwhile, eight industry divisions showed downturns last April, with manufacture of electrical equipment registering the highest annual decline of 28.1 percent.
The Value of Production Index (VaPI) likewise registered a slower increment of 9.7 percent in April 2022, from an annual growth rate of 375.1 percent in the previous month. In April 2021, the VaPI grew at an annual rate of 150.1 percent.
The PSA said of the 22 industry divisions, 16 reported positive growths which was led by manufacture of textiles with 51.1 percent annual growth rate.
On the contrary, the remaining six industry divisions recorded annual decreases in their production. The manufacture of electrical equipment had the fastest annual drop of 25.4 percent.
“The much slower growth in the MISSI manufacturing gauge may have to do, mathematically, with the normalization of the base/denominator effects (i.e., coming from much higher base a year ago), after triple-digit growth levels seen in recent months (quantitatively due to the lower base/denominator effects back then),” Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said.
“Furthermore, higher inflation could have also slowed down growth in the manufacturing gauge, in view of the need to pay for more expensive oil, imported commodities and other inputs (as these could have also reduced available funds for new investments/expansion projects and for other manufacturing/production activities), as well as slower demand in reaction to higher prices,” he added.
Ricafort said for the coming months, year-on-year inflation could still pick up in view of the increase in minimum wages in some regions effective as early as June 2022, and the increase in minimum transport/jeepney fares in Metro Manila, Central Luzon and Calabarzon initially effective June 9, 2022.
“All of which could result in higher prices of other affected goods and services (i.e., risk of second-round inflation effects), thereby could lead to higher costs for manufacturers/producers,” Ricafort said. – Angela Celis
