The Philippine manufacturing sector recorded slower decline rates in both volume and value terms in August 2020 as chemical products and basic metals resisted the downward trend to post increases.
The Volume of Production Index (VoPI) declined at a slower rate of 9.9% year-on-year in August 2020 compared with the 14.6% contraction in July 2020, according to the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries (MISSI).
The slower downtrend in VoPI was influenced by increases in the indices of two heavily weighted industry groups, namely, chemical products (17.1%), and basic metals (3.9%), said PSA. This was further helped by the slower decreases registered by nine industry groups. August is the sixth consecutive month of decline after the VoPI recovered in February 2020 to break 14 months in a row of decreases.
The Value of Production Index (VaPI) dropped at an annual rate of 13.8% in August 2020, slower than the annual decrease of 17.2% in July 2020. The August 2020 figure was, however, the sixth consecutive month that VaPI had a negative growth and the fourth straight month of declining at a slower rate.
Contributing to the slower decline of VaPI in August 2020 were chemical products and basic metals, which showed annual increases of 11.4% and 0.1%, respectively. The slower drop in the indices of nine industry groups also eased the rate of decrease of VaPI for the manufacturing sector.
Based on responding establishments, the average capacity utilization rate of the manufacturing sector in August 2020 decreased slightly to 65.3% from 66.9% in the previous month.
Seven of the 20 industry groups had at least 80% average capacity utilization rate, led by machinery except electrical (87.9%), and followed by rubber and plastic products (84.7%), and printing (84.4%).
Almost one-fifth of responding establishments operated at full capacity.
The proportion of establishments that operated at full capacity (90% to 100%) was 17.4% of the total number of responding establishments. More than two-fifths (44.3%) operated at 70% to 89% capacity, and more than one-third (38.4%) operated below 70% capacity.