PH manufacturing expansion slows in Feb

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  • Philippine manufacturing continued to grow in February 2023, but at a slower pace
  • The Value of Production Index grew 11.1% while the Volume of Production Index rose 7.2%
  • A slower year-on-year increase in the index of manufacture of food products mainly slowed down growth in VaPI and VoPI
  • The average capacity utilization rate in February was 72.6%, down from 72.8% in January

The Philippine manufacturing sector continued to expand in February 2023, albeit at a slower pace than a year ago, as growth in the manufacture of food products eased, the Philippine Statistics Authority (PSA) said.

The Value of Production Index (VaPI) for manufacturing registered an 11.1% year-on-year increase in February 2023, but it was slower than the 16% growth in January 2023 and 77.2% in February 2022, according to PSA’s latest Monthly Integrated Survey of Selected Industries.

The Volume of Production Index (VoPI) likewise rose 7.2% in February, but it was slower than the double-digit annual growth rate of 11.2% in January this year and 69.8% in February 2022.

The index of manufacture of food products slowed to 13% year-on-year growth in February from 21.4% y-o-y in January 2023, mainly due to the slower VaPI expansion. The manufacture of food products accounted for 29.9% of the VaPI slowdown and had the highest weight out of the 22 industry divisions in the computation of VaPI for February 2023.

Other contributors to VaPI’s slower growth were the faster annual decline of electronic and optical products and slower increase in manufacture of other non-metallic mineral products. Six other industry divisions recorded slowdowns while five further industry divisions posted negative growth. Four industry divisions, meanwhile, saw increases led by the manufacture of basic metals with a 30.7% y-o-y surge.

As with VaPI, the slower year-on-year VoPI growth in February was mainly due to the slower 6.4% y-o-y expansion in the index of manufacture of food products from 14% in January 2023. The manufacture of food products contributed 29.7% to the VoPI downtrend in February 2023.

Other main drivers of the VoPI slowing were declines in the manufacture of computer, electronic and optical products, and manufacture of other non-metallic mineral products.

Five industry divisions also recorded slowdowns, four industry divisions showed year-on-year declines, and three industry divisions recorded faster annual drops in February 2023.

In contrast, there were five industry divisions that posted growth with the manufacturing and repair and installation of machinery and equipment having the highest increment of 34%.

Based on MISSI’s responding establishments, the average capacity utilization rate for the manufacturing sector in February 2023 was 72.6%, slightly lower than the 72.8% in the previous month.

Almost all of the industry divisions reported capacity utilization rates of more than 50%.

The top three industry divisions in terms of reported capacity utilization rate were manufacture of machinery and equipment except electrical at 81.6%, manufacture of transport equipment, 78.9%, and manufacture of coke and refined petroleum products, 77.8%.

Of the total, 22.1% of the surveyed establishments operated at full capacity of 90% to 100% while 35% operated at 70% to 89% capacity and 42.9% operated below 70% capacity.

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