FACTORY OUTPUT declined for the third straight month in May, the Philippine Statistics Authority (PSA) reported earlier this morning.
Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the Volume of Production Index (VoPI), contracting by 40.3% year-on-year in May.
This steep decline was slower than the contractions in April 2020 and May 2019, which were recorded at minus 43.6% and 7.8%, respectively.
Year to date, the decline in factory output averaged 17.9% compared to the 8.8% decline in 2019’s comparable five months.
“The reduction in the indices of all industry groups pulled down the VoPI during the month with petroleum products (-91.4%), transport equipment (-79.3%), and, footwear and wearing apparel (-76.6%),” the PSA said in a statement.
A similar trend was observed in factory output as measured by the Value of Production index, which posted a 42.1% decline from minus 45.5% the previous month.
In comparison, IHS Markit Philippine Manufacturing Purchasing Managers’ Index (PMI), which uses a different set of variables, showed factory activity remaining in contraction in May, but at a slower pace compared to the previous month. That month, the country’s PMI improved to 40.1 from 31.6 previously.
A PMI reading above 50 indicates an improvement in business conditions from the preceding month.
Average capacity utilization — the extent to which industry resources are used in the production of goods — averaged 73.4% in May. Only five of the 20 sectors registered capacity utilization rates of at least 80%. — Lourdes O. Pilar