PH manufacturing decline softens in July

Image by Pexels from Pixabay
Image by Pexels from Pixabay

The Philippine manufacturing sector recorded anew a slower downtrend in both volume and value in July 2020, with some industry groups led by petroleum products recording significant expansion.

The Volume of Production Index (VoPI) declined at a slower rate of 11.9% year-on-year in July 2020 compared with the 12.5% decrease in June 2020, according to the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries.

PSA said the slower downtrend in VoPI was brought about by the increases in the indices of three industry groups led by petroleum products. Contributing further to the slower drop in July 2020 were the slower decreases in the indices of seven industry groups.

The Value of Production Index (VaPI) also declined at a slower 14.8% in July 2020, from a 16% contraction in the previous month. The contraction of VaPI in July 2020, however, is the fifth consecutive month of annual decline.

Contributing notably to the slower annual decline in VaPI was the significant expansion observed in petroleum products which grew by 364.2%. Other industry groups with positive growth rates in July 2020 were wood and wood products (8.4%) and furniture and fixtures (2.3%). PSA said the slower drop in the indices of nine industry groups also softened the rate of decline for the sector.

The average capacity utilization rate of the manufacturing sector in July 2020 slightly decreased to 75.4% from 75.8% in June 2020.

Seven of the 20 industry groups had at least 80% average capacity utilization rate, led by machinery except electrical (86.5%), followed by printing (83.3%), and textiles (82.2%).

Almost one-fifth of responding establishments operated at full capacity.

The proportion of establishments that operated at full capacity (90% to 100%) was 17.3% of the total respondents. More than two-fifths (46%) operated at 70% to 89% capacity, and more than one-third (36.7%) operated below 70% capacity.

Acting Socioeconomic Planning Secretary Karl Kendrick Chua earlier said the country’s manufacturing performance is still expected to be adversely affected by the ongoing coronavirus disease pandemic in the near term.