BSP sees pickup in economic activity

Economic activity is expected to get a boost in the remaining weeks of the year as the Christmas season fuels demand for consumer goods.

Economic activity is expected to get a boost in the remaining weeks of the year as the Christmas season fuels demand for consumer goods.

The Bangko Sentral ng Pilipinas (BSP) said retailers and wholesalers have started stocking up in anticipation of higher sales in December, which could offset a drop in demand coming from areas affected by Typhoon Yolanda.

“Domestic demand conditions remain fairly buoyant,” the BSP said in a statement on Thursday.

“Output expansion is expected to be sustained over the coming quarters with higher-frequency indicators of demand, including vehicle sales, energy sales and manufacturing output still growing robustly,” it said.

The BSP noted that the purchasing managers index (PMI), which serves as a reliable indicator for business activity, for the manufacturing sector remained above the 50-point threshold. Any PMI score above 50 indicates the expansion for a specific industry in the coming months.

Latest data showed the composite PMI for all domestic businesses stood at 57.7 points in August, slightly higher than the 57.3 points in June. For the manufacturing sector, the PMI was at 56.1 points, better than 55.3 points at the end of the first semester.

“Purchases of the retail and wholesale sector were in expansion mode in preparation for the Christmas season,” the BSP statement read.

The BSP likewise noted that seven of 11 leading economic indicators tracked by the central bank supported the expectation that business activity would continue to pick up. Among the indicators monitored by the BSP include the composite PMI, inflation, car and electricity sales, and remittances from overseas Filipino workers.