A worker arranges cans on the production line of canned sardines inside a manufacturing plant in Santo Tomas, Batangas on March 1, 2023. (Photo by JAM STA ROSA / AFP)
Factory output in the Philippines declined in September, with nearly half of the industry experiencing contraction and others seeing slower growth, ending a five-month streak of expansion, the Philippine Statistics Authority (PSA) reported on Wednesday.
Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries (MISSI) showed that factory output, as measured by the volume of production index, declined to 6.3 percent year-on-year in September.
This marked a reversal from the 1.2 percent and 9.5 percent growth recorded in August and September 2023, respectively.
READ: PH manufacturing output growth eased in August
Month on month, the manufacturing sector’s output contracted by 3.6 percent, compared with the 0.9 percent drop in August.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said that the recent slowdown in local manufacturing is mainly due to disruptions caused by weather disruptions which led to work suspensions and damage to manufacturing facilities, especially in areas most affected.
“The storms also disrupted supply chains, especially in terms of losses in the agriculture sector that reduced output and some increase in price, especially in hard-hit areas, until supply chains normalized,” Ricafort told Inquirer.
Despite this, higher demand and sales, along with other business activities related to the Christmas holiday season, are expected to boost manufacturing and production, he said.
According to the statistics agency, the downtrend in the VoPi was mainly dragged by the manufacture of coke and refined petroleum products which fell by 12.8 percent from 13.6 percent growth in August.
Other primary contributors to the growth included the manufacture of beverages which declined by 8.5 percent from 12.4 percent last month.
This was followed by basic metals which logged in a contraction of 35.1 percent from 18.4 percent drop in the previous month.
Out of the 22 industries monitored by the PSA, 10 sectors reported declines, with basic metals leading the downturn. This was followed by a 23.8 percent drop in the manufacturing of wood, bamboo, cane, rattan articles, and related products, which had previously grown by 59.7 percent.
Meanwhile, growth in machinery and equipment excluding electrical slowed to 14.1 percent from 16 percent. Following closely are paper and paper products, which grew by 7.9 percent, compared with 8.1 percent.
In comparison, the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 53.7 in September, maintaining its position as the fastest among six ASEAN member countries. This was also above the ASEAN average of 50.5.
The sector’s average capacity utilization, or the extent to which industry resources are used in manufacturing, averaged 75.3 percent compared with 75.4 percent in August.