April Philippine factory reading lowest in 9 months

MANILA, Philippines — Growth in Philippine manufacturing eased in April amid a slight improvement to the country’s business conditions, according to monthly tracking done by IHS Markit for Nikkei Inc.

The seasonally adjusted Nikkei Philippines Manufacturing Purchasing Managers' Index fell to a nine-month low of 50.9 in April from 51.5 in March.

A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

Among the seven tracked members of the 10-country Association of Southeast Asian Nations, the Philippines saw the fourth-fastest pace of expansion in April, down from the third spot in March. Myanmar recorded the quickest PMI growth last month, followed by Vietnam and Thailand.

“April PMI revealed an even more subdued picture for the Philippines. With first quarter results already reflecting weaker manufacturing growth than at the end of last year, the latest data did little to raise hopes for the second quarter,” said David Owen, economist at IHS Markit.

Philippine output expanded at the weakest rate since September 2017, while new order growth — which increased at weakest rate since last July — was dampened by a quicker drop in export sales, Owen said.

“There was some positive news from the survey as firms reported an alleviation of import delays due to the recent port congestion at Manila. This led to the first improvement in supplier delivery times in nine months, although slowing output growth still led manufacturers to reduce stock levels,” the IHS Markit economist said.

““With the national election during May, production growth may be stifled again in the next survey. As such, it is looking like the second quarter may prove to be a challenging one for the manufacturing sector,” he added. — Ian Nicolas Cigaral