IMPLEMENTING granular lockdowns may spur production and export revenues for the manufacturing sector which recently saw a contraction amid heightened restrictions, the largest exporters alliance said.
Philippine Exporters Confederation Inc. (Philexport) Chairman George T. Barcelon is optimistic that easing the mobility restrictions will bode well for the manufacturers and exporters in the coming months.
“I believe the numbers will pick up in the following months for both domestic and export trades,” he told the BusinessMirror. “Authorities now realize [that a] lockdown has a downside impact economically and shifted to LGU [local government unit] granularity.”
According to the latest IHS Markit report, the country’s purchasing managers index (PMI) slid to 46.4 in August, a steep drop from 50.4 in July. It is the lowest record of the Philippines since May last year, effectively erasing previous gains by the industry. The decline was attributed to the implementation of the two-week enhanced community quarantine in August amid the growing cases of Covid-19 Delta variant.
PMI indicates the health of a country’s manufacturing sector and a reading of below 50 is deemed a contraction; above-50 score signals expansion.
While the granular lockdown promises better mobility, Barcelon said exporters will not still be able to meet this year’s targets.
For one, the Philexport official said the electronics sector—comprising the bulk of the country’s exports—is still reeling from shortage of components.
Barcelon noted this concern is on top of the continued shipment delays due to container imbalance in the pandemic. (Read related story: Export goal reviewed amid shipment delays, https://businessmirror.com.ph/2021/07/12/export-goal-reviewed-amid-shipment-delays/)
Trade Secretary Ramon M. Lopez recently said that the Covid-19 Inter-Agency Task Force has agreed to launch a pilot test of granular lockdowns in Metro Manila beginning September 8. The measure is eyed to be implemented in other areas by next month.
Lopez said the granular lockdown guidelines break down the degree of restrictions into levels 1-4; 4 is the most restrictive. He stressed that people are not allowed to go in and out of the vicinity under lockdown, except for health-care workers.
The lockdown may be placed for 14 days, he said, explaining that the period may be adjusted depending on the situation.
In a previous interview with the BusinessMirror, Barcelon said imposing hard lockdowns affects the supply chain of the export-oriented manufacturers.
He explained that exporters find it difficult to transport supplies coming outside the capital region given the restrictions. In addition, the companies will also need to work around with new schedules of production, he said.
Metro Manila is under general community quarantine from September 8 to 30.
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