Philippine manufacturing activity in March plunged to a historic low, thanks to the Luzon lockdown due to the coronavirus disease (COVID-19).
The Philippine Purchasing Managers’ Index (PMI) in March 2020 fell well below the 50.0 no-change mark to 39.7, down from 52.3 in February 2020, according to the latest PMI survey of London-based IHS Markit.
The latest figure was the lowest in the series history, having dropped below the 50.0 neutral mark for the first time, and signalled a marked deterioration in operating conditions.
“The COVID-19 pandemic took its toll on goods production in the Philippines in March, as the enforced lockdown of Luzon island led many manufacturers to halt operations until restrictions are lifted,” IHS Markit economist David Owen said in a statement.
Owen said these shutdowns led to sharp declines across the sector, with output, new orders, employment and stocks of purchases all falling at record paces.
“Firms that remained open meanwhile saw a large delay in supplier delivery times, restricting their ability to operate at full capacity,” Owen noted.
Supply chains “faltered amid border controls and local travel restrictions” while business confidence subsequently weakened and firms registered large cuts to both purchases and inventories.
In addition, manufacturing sales were stymied in March, with clients having to massively reduce order books amid much weaker consumer demand. Exports were similarly down as surrounding countries enforced their own lockdowns whilst curtailing foreign orders.
“Unsurprisingly, businesses were much less positive regarding the 12-month future period. With no one knowing the full timeline of the pandemic, the extent of the economic impact remains largely unknown,” Owen said.
