Image credits: Nonie Reyes
THE Philippine manufacturing sector expanded steadily in February this year, indicating further progress across the board.
International think tank IHS Markit reported on Monday that the Philippines’s Purchasing Managers’ Index (PMI) in February remained at 52.5, keeping its pace unchanged from the previous month.
A country’s PMI gauges the health of its manufacturing sector. It is calculated as a weighted average of five individual subcomponents. Readings below 50 show deterioration in the industry while readings above the 50 threshold signal growth in the manufacturing sector.
This is the first time that the Philippines’s PMI hit two consecutive months of being in growth territory since the beginning of pandemic-induced lockdowns and restrictions.
“Filipino manufacturers kept up a solid rate of expansion overall in February, thereby extending the current sequence of improvement in operating conditions to two months,” IHS Markit said.
“The latest reading signaled a solid uptick in operating conditions, with the rate of growth matching that seen in January,” it added.
The Philippine manufacturing sector also fared well compared to its counterparts in the region. IHS Markit said among the seven countries in Southeast Asia they monitor for PMI, the Philippines recorded the second best performance in February.
Singapore took the lead with a PMI of 55.2 during the month. Next to the Philippines’s 52.5 is Vietnam’s 51.6 and Indonesia’s 50.9.
Thailand and Malaysia fell into contraction territory to record a 47.2 and 47.7 PMI, respectively. Myanmar performed the worst during the month with a PMI of 27.7.
The Philippines’s PMI is also above the 49.7 average PMI of Asean for February.
This growth of the sector also looks like it’s trickling down to the grassroots of the manufacturing industry, as reports of layoffs are starting to decline.
“Output and new order growth persisted, while an acceleration in preproduction inventories suggests a commitment towards greater production in the months ahead. In addition, the rate of job shedding eased to the softest in 12 months,” IHS Markit Economist Shreeya Patel.
Patel, however, warned that the virus still continues to pose a large threat to material shortages and transportation delays as a result of pandemic restrictions.
“For now, controlling the Covid-19 pandemic remains at the heart of the Philippines’ agenda, and whilst vaccines have been secured, delivery delays have severely hindered efforts to vaccinate the nation,” Patel said.