The country’s manufacturing output posted a 2.5 percent increase in July, according to the Philippine Statistics Authority (PSA).
According to the Monthly Integrated Survey of Selected Industries (MISSI) for July, the Volume of Production Index (VoPI) recorded a faster year-on-year growth rate of 2.5 percent versus the previous month’s annual rate of 0.7 percent.
In July 2021, the VoPI upsurged at an annual rate of 534.4 percent.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in a statement yesterday the much slower growth in the MISSI manufacturing gauge may have to do with the normalization of the base effects, after triple-digit growth levels seen in earlier months, in view of the large-scale lockdowns from 2020 to 2021.
“Furthermore, elevated inflation/prices of inputs could have also slowed down growth in the manufacturing gauge, in view of the need to pay for more expensive oil, imported commodities, other imports, and other inputs, as well as slower demand in reaction to higher prices,” Ricafort said.
“Moreover, higher interest rates that led increased borrowing costs for some manufacturers could have a tightening effect on the manufacturing sector in terms of higher interest rates paid especially on long-term loans,” he added.
Out of the 22 industry divisions, 14 reported positive annual growths which was led by manufacture of fabricated metal products, except machinery and equipment with 30.3 percent annual growth rate.
On the contrary, eight industry divisions posted annual decreases with manufacture of electrical equipment exhibiting the fastest annual drop of 52.7 percent.
The Value of Production Index (VaPI) sustained its upward trend, the PSA said, recording a double-digit annual increment of 10.6 percent in July 2022. This increase is faster than the previous month’s annual rate of 8.3 percent. In July 2021, the VaPI accelerated with an annual growth rate of 529.9 percent.
The PSA said contributory to the upturn of VaPI were the annual growths exhibited by 17 out of the 22 industry divisions.
Among these, manufacture of machinery and equipment except electrical posted the highest annual growth rate of 32.1 percent in July 2022.
On the other hand, the remaining five industry divisions posted decrements in their production with manufacture of electrical equipment registering the fastest annual decline of 51.2 percent. – Angela Celis
