NextGen Day

MANILA, Philippines — The Philippines is in full swing of economic recovery, as manufacturing output climbed 53.2 in March 2022, outperforming its Asean neighbors once again, thanks to greater mobility and effective implementation of health and safety protocols with fewer and fewer coronavirus disease 2019 (Covid-19 cases).

The Board of Investments (BOI), the Department of Trade and Industry’s industry and investment promotion arm, expects the country’s industrial output will continue to improve this year.

“The surge of the Omicron variant dampened our recovery expectations at the start of the year,” Trade Secretary and BOI Chairman Ramon Lopez said. “However, with the lesser and lesser Covid-19 cases in February and March, all signs point to a full recovery in full swing starting March and in the coming months.”

The IHS Markit Philippines’ Purchasing Managers’ Index (PMI) rose to a three-year high of 53.2 in March, beating its Asean counterparts once again as the country’s mobility was at its greatest, snapping four months of the index above 50.

“As a result, we anticipate a strong first-quarter gross domestic product (GDP) performance and manufacturing PMI expansion in April.” On the plus side, manufacturing output for the entire year of 2021 capped a strong year that included nine consecutive months of growth culminating in December,” Lopez stated.

The Volume of Production Index (VoPI) increased 17.9% year-over-year in December 2021, according to the Philippine Statistics Authority’s (PSA) monthly survey of selected industries, which is slower than the 25.8% growth in November but a year-over-year turnaround from the 14.8 percent decline in December 2020.

The manufacture of wood, bamboo, cane, rattan articles, and associated products, which expanded by 122.6 percent year over year, led the list of 11 industries that grew in December, according to the PSA.

Other gainers include machinery and equipment manufacturing, as well as electrical, both of which increased by 50%.

Coke and refined petroleum products (48 percent), computer, electronic, and optical products (27 percent), nonmetallic mineral products (37 percent), food products (32 percent), and fabricated metal products (32 percent) also saw double-digit growth (40 percent).

Around a fourth of the factories were operating at full capacity.

The Value of Production Index (VaPI) increased by 18.6% in December, compared to 27.2 percent in November.

VaPI climbed by 47 percent for the entire year, reversing a 43 percent decline in 2020.

“Our economy grew at 5.6 percent in 2021, exceeding our target of 5 to 5.5 percent, thanks to a nine-month run of manufacturing output expansion.” By extending its run till the end of the year, the BOI was able to achieve a significant 7.7% GDP growth in the fourth quarter,” Trade Undersecretary and BOI managing director Ceferino Rodolfo stated, saying that manufacturing was one of the sectors that saw increased investment.

According to data from the Bangko Sentral ng Pilipinas, the manufacturing sector’s growth was aided greatly by a spike in the country’s foreign direct investment (FDI) net inflows last year, which reached an all-time high of US$10.518 billion, up 54.2 percent from US$6.822 billion in 2020. (BSP).

In 2017, the previous high was US$10.3 billion. The net FDI inflows in 2021 also exceeded the government’s previous forecast of US$8.5 billion.

“The increase in FDI indicated ongoing good foreign investor sentiment toward the country with hopes of a rebound in domestic economic activity and falling Covid-19 reported cases, as well as the global economy strengthening,” Rodolfo stated.

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