Philippine manufacturing output back to contraction territory in April —IHS Markit

The Philippine manufacturing output contracted in April to end a three-month expansion as stricter quarantines were reinstated during the month, according to IHS Markit.

Results of the monthly survey conducted by IHS Markit indicated that the Philippines' Purchasing Managers' Index (PMI) fell to 49.0 in April.

The PMI is a composite indicator of the manufacturing sector’s performance, with 50.0 as the threshold. A reading above 50 indicates growth while below 50 is a contraction.

The index was recorded at 52.5 in both January and February, and 52.2 in March.
 

IHS Markit attributed April's decline to the reimposition of the strict community quarantines in the NCR Plus Bubble, which covers Metro Manila, Cavite, Laguna, Rizal, and Bulacan.

"April survey data revealed a setback for the Filipino economy, with operating conditions falling back into contraction territory after only one full quarter of growth," said IHS Markit economist Shreeya Patel.

"Tightening restrictions led to another round of factory and business closures, with output particularly hard-hit. Meanwhile, labor force cuts extended into the second-quarter of 2021," she added.

The NCR Plus bubble was placed under the strictest enhanced community quarantine (ECQ) starting March 29 to April 11, followed by the modified ECQ starting April 12 to May 14.

Patel said material shortages and transportation bottlenecks were also widely reported during the month, causing supply-side pressures and driving costs higher.

"Firms will hope that these issues are resolved, but with the full impact of the Suez blockage yet to take effect, the disruption to global trade is expected to reverberate," she said.

Moving forward, the economist said the vaccination rollout will dictate the pace of the return to normality. —KBK, GMA News