The Philippine Statistics Authority (PSA) reported a substantial increase in factory production in July, driven by gains in electronics, transportation, and food sectors.
Preliminary results from the PSA’s Monthly Integrated Survey of Selected Industries (MISSI) revealed that the Volume of Production Index (VoPI) grew by 5.3 percent in July from 3.6 percent the previous month.
It also surpassed last year's growth of 3.6 percent.
The MISSI is a regular survey that provides insights into the performance of various industries regarding production, sales, inventories, and employment on a monthly basis.
According to the PSA, the leading contributors to the increase were the computer, electronic, and optical products sectors, which increased by 12.5 percent compared to 1.9 percent in June 2024.
This was followed by the transport equipment sector at 0.4 percent and food products, which surged by 14 percent from an 11.4 percent increase in June last year.
Among the remaining 19 industry divisions, 11 recorded growth during the period, while eight reported declines.
The PSA noted that 30.2 percent of the surveyed manufacturing firms operated at full capacity, whereas 9.7 percent operated at less than 50 percent capacity.
Meanwhile, the value of production index (VaPI) recorded a growth rate of 4.7 percent in July 2024, up from 3.3 percent the previous month and 3.5 percent in July 2023.
This increase was primarily driven by a robust 14.4 percent growth in the manufacture of computer, electronic, and optical products. This sector alone contributed 34.4 percent to the rise in VaPI for manufacturing in July.
Among the 22 industry divisions, the manufacture of computer, electronic, and optical products held the second-highest weight in the VaPI calculation for the manufacturing sector.
Other key contributors to the increase in VaPI included a 2.9 percent rise in the manufacture of transport equipment, rebounding from a 5.5 percent decline the previous month.
Additionally, the VaPI for food products grew at a faster pace of 14.6 percent, up from 12.0 percent in June 2024.
Among the remaining 19 industry divisions, 11 reported annual increases in their VaPI, while eight experienced declines in July 2024.
The most significant decrease was seen in the manufacture of basic metals, which fell by 19.1 percent during the period.
Last Sept. 2, S&P Global reported that manufacturing activity in the country remained stable in August, as sluggish international sales hindered growth in output and new orders.
The latest S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI), which measures factory output, held steady at 51.2, the same level recorded in June.
This marks the twelfth consecutive month that the index has remained above the 50-point threshold, indicating ongoing growth.
Maryam Baluch, an economist at S&P Global Market Intelligence, said that the Philippine manufacturing sector has demonstrated sustained, albeit modest, gains as the third quarter progresses.
“Growth in output and new orders accelerated on the month, thereby highlighting improving demand trends. However, employment fell, and buying activity cooled, suggesting that manufacturers remain cautious about growth prospects,” Baluch said.
She also noted that confidence levels in the latest survey dropped to a four-month low, further indicating that expectations for production have softened.
Looking ahead, S&P Global reported that firms in the Filipino manufacturing sector anticipate further output expansion over the next 12 months, with the index remaining significantly above the neutral 50.0 mark.
The PMI is derived from a survey of approximately 400 manufacturers and is a weighted average of several factors, including new orders, output, employment, suppliers’ delivery times, and purchase stocks.