Factory output growth accelerates in April

MANILA, Philippines — The country’s manufacturing output grew at a faster pace in April compared to the previous month as manufacturers frontloaded production activities to beat rising costs due to the Middle East conflict.

Data from the Philippine Statistics Authority (PSA) showed that the Volume of Production Index (VoPI) registered a faster increase of 12 percent in April from 10.2 percent in March.

The April VoPI growth also marks a turnaround from the 2.4-percent contraction in the same month last year.

Average VoPI growth from January to April stood at 6.8 percent.

The data is based on the PSA’s Monthly Integrated Survey of Selected Industries.

PSA attributed the faster VoPI growth rate primarily to the double-digit increase in the production of coke and refined petroleum products at 52.7 percent in April from a 3.4-percent decline in the previous month.

Of the remaining 21 industry divisions, 14 posted increases in April. These are computer, electronic and optical products; food; basic metals; transport equipment; electrical equipment; rubber and plastic products; wood, bamboo, cane, rattan articles and related products; leather and related products, including footwear; furniture; basic pharmaceutical products and pharmaceutical preparations; printing and reproduction of recorded media; tobacco products; beverages and textiles.

Meanwhile, seven industry divisions registered declines. These are other manufacturing and installation of machinery and equipment; wearing apparel; other non-metallic mineral products; paper and paper products; chemicals and chemical products; machinery and equipment and fabricated metal products.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the faster manufacturing output growth “could be partly due to some frontloading activities by manufacturers and their buyers before prices and interest rates go up further.”

Ricafort said the weaker peso and hedging activities by both buyers and manufacturers since the Middle East conflict have also supported continued growth.

Based on responding establishments, average capacity utilization rate for manufacturing in April was at 78.4 percent, slightly lower than the previous month’s 78.6 percent.

“All industry divisions reported capacity utilization rates of more than 65 percent during the month,” the PSA said.

Industry divisions with the highest reported capacity utilization rate in April were coke and refined petroleum products (91.8 percent); leather and related products, including footwear (82.6 percent); and other manufacturing and repair and installation of machinery and equipment (81.8 percent).

Around 33.4 percent of establishments operated at full capacity (90 percent to 100 percent) in April.

Meanwhile, 41.1 percent operated at 70 to 89 percent capacity and 25.5 percent were at below 70 percent capacity.