MANILA, Philippines — The country’s factory output grew at a faster pace in May amid lower input costs.
Preliminary results of the Philippine Statistics Authority (PSA)’s Monthly Integrated Survey of Selected Industries showed the Volume of Production Index (VoPI) posted an 8.1-percent growth in May, up from 7.7 percent in the previous month.
This is also a turnaround from the 0.6-percent contraction in May last year.
The PSA attributed the growth in VoPI mainly to the upturn in the manufacture of electrical equipment at 53.7 percent in May from 19.2 percent in April.
Other primary contributors to the VoPI’s uptrend in May were the slower decline in chemical and chemical products at -21.2 percent during the period from -32.2 percent in the previous month, and the increase in beverages at 3.9 percent in May from a 0.5 percent contraction in April.
The PSA said the Value of Production Index (VaPI) also registered a faster growth rate of 10.3 percent in May this year from 10.1 percent in the previous month, and 6.6 percent in May 2022.
This was again mainly due to the manufacture of electrical equipment, which registered a 54.2-percent increase in May from 19.5 percent in April.
Also cited as main contributors to the higher VaPI growth in May were the slower declines in chemical and chemical products at -23.5 percent during the period from -33.3 percent in the previous month, and computer, electronic and optical products at -7.1 percent in May from -9.4 percent in April.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the faster growth in manufacturing output is due in part to the easing inflation trend that reduced the input costs of manufacturers.
“Better weather conditions into the summer or dry season also helped increase agricultural production or planting or harvests that, in turn, led to increased local supplies and reduced prices or input costs for some manufacturers,” he said.
For the coming months, he said the continued downtrend in inflation and the further recovery of tourism and other sectors of the economy are expected to support further gains in manufacturing.
Earlier this week, the PSA reported that inflation slowed down for the fifth straight month to 5.4 percent in June due largely to slower increase in food prices.