PH manufacturing drops 6.3% in March

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The Philippine manufacturing sector recorded declines in both volume and value in March 2020 with a large number of majority industry groups posting double-digit decreases, according to the Philippine Statistics Authority (PSA).

Manufacturing activities have been negatively impacted by the imposition of enhanced community quarantine to quell effects of the coronavirus pandemic. The ECQ began on March 17 and is expected to last until May 15; it covers the island of Luzon, including Metro Manila, which generates around 30% of the country’s gross domestic product.

Based on preliminary results of PSA’s Monthly Integrated Survey of Selected Industries, the Volume of Production Index (VoPI) dropped 6.3% in March 2020 after making a turnaround after 14 months in February 2020 with a positive growth of 4%. In March 2019, VoPI shrank at a faster rate of 8.8%.

Fifteen major industry groups pulled down the VoPI with the following major industry groups exhibiting at least 25% decreases: petroleum products (-34.3%), tobacco products (-33.9%) and miscellaneous manufactures (-29.0%).

The Value of Production Index (VaPI) continued to drop at an annual rate of 11.3% in March 2020. This decline was faster than the reported decreases in the previous month at 1% and in March 2019 at 4.4%. This is also the 16th straight month of decline for VaPI.

The reduction was largely due to decreases in indices of 17 major industry groups, the first three, which had at least 30% annual declines, were petroleum products (-40.5%), tobacco products (-30.9%) and miscellaneous manufactures (-30.2%).

Average capacity utilization rate for total manufacturing in March 2020 was posted at 84.5%. Twelve of the 20 major industries had at least 80% capacity utilization rates led by petroleum products (90.1%), basic metals (88.8%) and machinery except electrical (86.4%).

More than a quarter of total manufacturing establishments operated at full capacity in March 2020.

The proportion of establishments that operated at full capacity (90% to 100%) was more than a quarter (28.6%) of the total number of establishments for manufacturing. More than half (53.6%) operated at 70% to 89% capacity while almost one-fifth (17.9%) operated below 70% capacity.