MANILA -- The Philippine manufacturing sector, as reflected by the purchasing managers’ index (PMI) in October posted a 10-month high score of 54, from its previous score of 52 in September, indicating an uptick in the sector's activity to usher-in the fourth quarter.
IHS Markit's Nikkei PMI report released Monday said this signals a solid improvement in the country’s manufacturing sector, as it recorded continued growth in new orders, output, purchasing activity, and employment.
“The latest Nikkei survey data suggested that growth in the Philippines manufacturing sector gathered strength in October. The headline PMI reading posted the highest level in 10 months and indicated a marked improvement in the health of the sector at the start of the fourth quarter,” said IHS Markit Economist David Owen.
The Philippines also has the highest PMI score among surveyed Southeast Asian countries in October, surpassing manufacturing activities of Vietnam with PMI of 53.9 and Indonesia at 50.5.
In a text message, Trade Secretary Ramon Lopez said manufacturers in the Philippines remain confident with the country’s strong economic fundamentals and reforms being undertaken by the administration.
“Investments continue to drive growth based on FDI (foreign direct investments) and BOI (Board of Investments) latest numbers, as investors see the political will of the current administration to institute reforms such as the recently passed EODB law (Ease of Doing Business and Efficient Government Service Delivery Act) and policies leading to further liberalization of more sectors to allow greater foreign equity,” Lopez said.
“Investment promotion policy is key in creating more jobs and business opportunities that will spread more prosperity and enable more Filipinos to beat poverty,” he added.
However, the IHS Markit survey cited that inflationary pressures and slower processes in ports are challenging the performance of manufacturers.
“Longer lead times were reported for the third month in a row in October, with the degree of lengthening greater than in September. Panellists linked this to the ongoing port congestion at Manila, leading to protracted delivery times for some manufacturers. Longer customs checks and recent weather conditions were also noted,” IHS Markit said.
“At the same time, inflationary pressures led to the sharpest uptick in selling prices seen since the survey began in 2016,” Owen noted, on the other hand. (PNA)