London think tank says PH manufacturing not only survived Taal eruption, but grew faster in January
The eruption of Taal Volcano disrupted the operations of some companies in Calabarzon last January but the Philippines’ manufacturing sector posted a faster growth that month, according to London-based information provider IHS Markit Ltd.
The latest IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI) released on Monda (Feb. 3) showed that the seasonally adjusted PMI further increased to 52.1 last January from 51.7 in December 2019.
A score of more than 50 PMI reflected an overall increase in manufacturing activity.
David Owen, IHS Markit economist, said while “some businesses were notably affected” by the eruption, “for the most part, the Philippines manufacturing sector continued to grow.”
“Operating conditions improved at the joint-strongest pace for a year, with production increasing moderately amid stronger demand for goods,” Owen said.
Taal’s eruption caused displacement of people and disruption of businesses in areas that included the provinces of Batangas and Cavite, which took the brunt of the eruption’s impact.
Economic zones in Calabarzon host some of the country’s biggest manufacturing and export sectors, including cigarettes, electronics and semiconductors.
“In particular, export sales have now risen in three out of the past four months, signalling an improving trade climate as US-China relations appear to brighten,” said Owen.
“If this is sustained, sales growth could strengthen further this year,” he added.
Owen was referring to Washington and Beijing’s “phase one” trade deal, which the two global economic giants signed last Jan. 15, about two years after US President Donald Trump waged a trade war on China.
Owen, however, took note that Taal’s eruption also highlighted the Philippines’ problem with road traffic which he said “disrupted delivery times in each of the past six months.”
He said the Philippine government was now addressing road bottlenecks with its ambitious “Build, Build, Build” infrastructure program.
“This is clearly an important project for manufacturers, with several pinning confidence around future output onto improved traffic conditions,” Owen said.
Edited by TSB
