Philippines: Factory output growth slows in May

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The country's manufacturing output posted a slower growth in May due to the decline in the production of metal products, chemicals and computer products, according to the Philippine Statistics Authority (PSA).

Preliminary results of the PSA's Monthly Integrated Survey of Selected Industries released yesterday showed that the Volume of Production Index (VoPI) registered a 3.2-percent growth in May, lower than the 6.3-percent increase in April and the 6.1-percent expansion in May 2023.

The PSA said the lower VoPI growth was primarily due to the slower increase in the three industry divisions.

In particular, the production of fabricated metal products, except machinery and equipment declined by 13.4 percent in May from the 29.9 percent increase in April.

Manufacture of chemical and chemical products also contracted by 11.7 percent in May, a reversal of the 16.6 percent growth in the previous month.

Production of computer, electronic and optical products also decreased by 0.3 percent in May from the 5.2 percent increase in April.

'Inflationary pressures, reflected by data from PSA, and the recent currency depreciation, indicated in BSP (Bangko Sentral ng Pilipinas) data, may have contributed to this, making the raw materials and work-in-progress costlier, especially those that are being imported,' Philippine Institute for Development Studies senior research fellow John Paolo Rivera said in an email yesterday.

Inflation or the rate of increase in average prices of goods and services usually purchased by households eased to 3.7 percent in June, snapping a four-month uptrend amid slower increases in utility and transport costs.

The PSA said the average capacity utilization rate for manufacturing in May this year was reported at 75.5 percent, up from 75.3 percent in the previous month and 73.5 percent in May 2023.

'All industry divisions reported capacity utilization rates of more than 60 percent during the month,' the PSA said.

Industry divisions with the highest reported capacity utilization rate in May were the manufacture of machinery and equipment except electrical (83.4 percent), manufacture of other non-metallic mineral products (82.1 percent) and manufacture of rubber and plastic products (81.2 percent).

Of the total number of responding establishments, 28.1 percent operated at full capacity (90 to 100 percent) in May.

Meanwhile, 42.4 percent were running at 70 to 89 percent capacity and 29.4 percent operated below 70 percent capacity.