Trade and Industry (DTI) Secretary Ramon M. Lopez said the decline in the country’s Purchasing Managers’ Index (PMI) or factory output in October as “marginal” saying the economy is just on a temporary pause.

“The slight decline in the Philippine manufacturing PMI merely reflects a pause in our economy’s recovery momentum. It just shows that we are still in an adjustment period, with marginal ups and downs, but essentially the general slope is upward,” according to Lopez. 

He expressed confidence that the economy is generally on the path to recovery, although overall demand will still be subdued as compared to pre-pandemic levels, as some jobs are just starting to be recovered. 

The country’s PMI in October dropped to 48.5 percent from September’s 50.1. He explained that a 50.0 index is a neutral mark in manufacturing output with any score above signifying an improvement of activity. 

“We have observed lesser business closures but we recognize that there are still reduced staffing levels. As such, this still affects consumer confidence, but situation is getting better as we ease up the

restrictions,” he said. 

Lopez further explained that market demand is still subdued since not all consumers are back. “There are still restrictions on age, movement, events, mass gathering, and tourism. But we have started the reopening of the economy and shall continue to do so gradually and safely," he said. 

The trade chief also assured that the government is doubling its efforts in rebuilding the economy, working together with the private sector for them to stay afloat, recover, and thrive in a post-pandemic recovery. 

“Given this, our focus has been really empowering businesses to COVID-proof their operations and ensure strict implementation of health standards in establishments to boost consumer confidence,” Lopez stated. 

The Trade Secretary added that several investment policies have been liberalized to incentivize the implementation of COVID-proofing activities, and the production of critical goods and services that are needed in the fight against COVID-19.  

“Given these health measures, we are more confident in further opening up the economy without undermining our efforts to contain the spread of COVID-19,” he noted. 

The PMI is a survey-based economic indicator designed to provide a timely insight on business conditions. The PMI is widely used to anticipate changing economic trends in official data such as GDP, or sometimes as an alternative gauge of economic performance and business conditions to official data, as the latter sometimes suffer from delays in publication, poor availability or data quality issues. 

The PMI is produced globally by IHS Markit although a small number of trade associations also produce local PMIs in certain markets.