Home » Customs & Trade, Press Releases » PH manufacturing index improves in Jan despite Taal eruption

The Philippine manufacturing sector grew at its strongest rate in January 2020 since January 2019 despite the disruption caused by Taal Volcano’s eruption, according to the latest Purchasing Manager’s Index (PMI) survey of London-based industry information and analytics service provider IHS Markit.

The IHS Markit Philippines Manufacturing PMI rose for the second month in a row to 52.1 in January 2020, from 51.7 in December 2019, to signal a moderate improvement in operating conditions at goods-producing firms.

A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month; below 50 represents a contraction, while 50 indicates no change.

Production levels grew at a notably stronger pace from the previous month, supported by a quicker rise in new orders and the beginning of new contracts. At the same time, some firms noted that output was limited by the recent Taal volcano eruption, though this only partly dented overall growth.

“Whilst some businesses were notably affected by the Taal volcano eruption in January, for the most part, the Philippines manufacturing sector continued to grow in January,” IHS Markit economist David Owen said in a statement.

“Operating conditions improved at the joint-strongest pace for a year, with production increasing moderately amid stronger demand for goods,” Owen added.

He noted in particular export sales, which he said have now risen in three out of the past four months, signalling an improving trade climate as US-China relations appear to brighten.

“If this is sustained, sales growth could strengthen further this year,” Owen pointed out.

He said, however, that one clear issue heightened by the eruption was road traffic, which had disrupted delivery times in each of the past six months.

“The government is seeking to address this with their ‘Build, Build, Build’ project to place greater investment in road infrastructure. This is clearly an important project for manufacturers, with several pinning confidence around future output onto improved traffic conditions,” Owen said.

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