By Bernadette Therese M. Gadon, Researcher
FACTORY PRODUCTION grew at a slower tempo in December however remained within the constructive territory for the ninth straight month regardless of the availability chain disruption within the aftermath of Storm Odette.
Preliminary outcomes of the Philippine Statistics Authority’s Month-to-month Built-in Survey of Chosen Industries (MISSI) confirmed manufacturing facility output, as measured by the quantity of manufacturing index (VoPI), went up by 17.9% 12 months on 12 months in December.
This was slower than November’s revised 25.8% progress and a turnaround from the 14.8% contraction recorded in December 2020.
December was the ninth consecutive month that the VoPI remained within the constructive territory or since April’s 152.1% surge.
This introduced common manufacturing facility output progress final 12 months to 50.3%, reversing the 40.5% decline in 2020.
The PSA attributed December’s progress to year-on-year will increase in half of the 22 trade divisions, led by manufacture of wooden, bamboo, cane, rattan articles, and associated merchandise which jumped by 122.6%.
Different industries that confirmed progress included equipment and tools besides electrical (to 50% from 40.7%), electrical tools (49.6% from 44.9%), and coke and refined petroleum merchandise (47.6% from 84.8%).
In the meantime, the next industries registered declines in December: primary pharmaceutical merchandise and pharmaceutical preparations (-30.2% from -10.5% in November), drinks (-14.6% from -0.8%), and tobacco merchandise (-14.5% from -20.4%).
As compared, IHS Markit’s Philippines Manufacturing Buying Managers’ Index (PMI) barely elevated to a nine-month excessive of 51.8 in December from 51.7 in November. A studying above 50 marks an enchancment for the manufacturing sector whereas something beneath signifies deterioration.
The capability utilization of those factories averaged 67.3% in December, barely down from 67.8% in November. Of the 22 sectors, 20 averaged a capability utilization price of not less than 50%.
Analysts mentioned December’s progress was resulting from base results after manufacturing facility manufacturing practically grounded to a halt in 2020 amid the strict lockdown restrictions imposed to comprise the unfold of the coronavirus illness 2019 (COVID-19).
“Base results seem to nonetheless play an element within the latest report with the restoration magnified from the sharp fall within the earlier 12 months. Within the coming months, we do anticipate these progress charges to reasonable additional however stay in growth because the economic system reopens regularly,” ING Financial institution N.V. Manila Senior Economist Nicholas Antonio T. Mapa mentioned in an e-mail.
Safety Financial institution Corp. Chief Economist and Assistant Vice-President Robert Dan J. Roces mentioned in a separate e-mail interview that December noticed most financial sectors carry out strongly, due to the additional leisure of mobility curbs in Metro Manila and different components of the nation.
“December was a powerful month for a lot of the economic system with delicate neighborhood quarantines and above pre-pandemic mobility, and the slower output could also be attributed to some effects coming from Storm Odette but additionally resulting from a slight seasonal pullback,” he mentioned.
In a Viber cellphone interview, Philippine Chamber of Commerce and Business (PCCI) President George T. Barcelon mentioned that the easing manufacturing progress seen in December is “regular.”
“Individuals don’t need to carry an excessive amount of stock transferring into the brand new 12 months,” Mr. Barcelon mentioned. He added that the availability chain has not but stabilized, noting that incoming shipments of uncooked supplies have been disrupted.
In mid-December, Storm Odette (worldwide identify: Rai) swept by way of components of the Visayas and Mindanao, leaving harm to agriculture and infrastructure price P13.3 billion and P17.19 billion, respectively.
For January, analysts are taking a look at a modest output, as a result of reimposition of tighter restrictions amid the surge of the Omicron variant within the nation. Nevertheless, they anticipate manufacturing to select up once more by February.
Metro Manila and different areas have been positioned beneath Alert Degree 3 in January, however are at present beneath a looser Alert Degree 2.
“The Omicron surge in January might have solely a modest affect on manufacturing exercise and we anticipate a fast restoration by February as mobility restriction have been relaxed considerably,” Mr. Mapa mentioned.
“For January, it was reported that the manufacturing sector’s output and new orders contracted given the resurgence of Omicron in addition to the lingering affect of Odette, on high of remaining uncooked materials shortages that led producers to boost promoting costs thus the MISSI in January might present that underperformance,” Mr. Roces mentioned.
Manufacturing PMI studying in January hit the 50 mark that denotes no change from earlier month. IHS Markit traced this to Storm Odette’s aftermath in addition to the recent surge in COVID-19 circumstances.
“For February, we anticipate manufacturing to revert to an uptrend on the again of a pickup in manufacturing exercise as mobility improves given the easing of quarantine restrictions within the capital area and because the sector’s capability utilization expands amid a deceleration in coronavirus new infections,” Mr. Roces added.
Mr. Barcelon mentioned he views this 12 months with “guarded optimism,” hoping new COVID-19 circumstances will proceed to drop.
The Division of Well being reported 3,574 new circumstances on Feb. 8, bringing the full coronavirus circumstances within the nation to three.62 million. Energetic circumstances, in the meantime, have been tallied at 105,550.
“Sa ngayon, pababa ng pababa ’yung an infection eh in order that’s a very good factor. Pero kailangan ma preserve natin hanggang umabot ng center or finish of February and if that’s sustained at a decrease price, that’s good (At current, new infections have trended decrease in order that’s a very good factor. However we nonetheless want to keep up this till mid- or end-February and if that’s sustained at a decrease price, that’s good),” Mr. Barcelon mentioned.