Philippines manufacturing returns to ‘marginal’ growth in June

marginal growth

Manufacturing in the Philippines returned to “marginal” year-on-year growth in June, with the purchasing managers’ index (PMI) rising to 50.8 as quarantine restrictions were relaxed in areas that account for half of the economy and are home to many manufacturers and exporters.

The above-50 PMI in June indicated expansion in manufacturing activities, reversing the below-50 indices in April and May, which indicated contraction. This was the time when the National Capital Region (NCR) Plus — Metro Manila and the provinces of Bulacan, Cavite, Laguna, and Rizal — was placed under the most stringent lockdown in order to contain a COVID-19 outbreak.

“Declines across output, new orders and employment eased while exports rose sharply during the month,” said Shreeya Patel, an economist at London-based global information provider IHS Markit Ltd., in a report on Thursday, July 1.

“Expectations of greater production levels were reflected in firms adding to their stock levels, amid hopes of a stronger third quarter,” Patel said.

However, Patel said the remaining quarantine restrictions still stifled domestic demand, while port congestions slowing global trade were hampering export sales.

The Philippines nonetheless bucked the trend in ASEAN where the regional PMI slipped to 49 in June from 51.8 last May as most other countries in the region posted negative indices when factory production and order books fell due to tighter lockdown measures and supply bottlenecks.


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