Philippines PMI March 2021


Philippines: Manufacturing PMI inches down in March but remains in expansionary territory

April 5, 2021

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 52.2 in March, slightly below February’s 52.5. Nonetheless, the PMI remained above the crucial 50-threshold, signaling a modest improvement in manufacturing sector conditions, compared to the previous months.

March’s slightly lower reading was largely driven by a softer expansion in new orders, amid significantly lower foreign demand due to ongoing Covid-19 restrictions abroad. Moreover, falling employment levels—for the 13th successive month— further weighed on the headline reading. On a more positive note, output growth picked up pace over the previous month, while manufacturers remained optimistic with regard to output in the coming 12 months. Lastly, on the price front, raw material shortages, resulted in a sharp acceleration to input cost inflation, which was partially passed on consumers, with firms hiking their output charges at the quickest pace since November 2018.

Shreeya Patel, economist at IHS Markit, said:

“The Philippines manufacturing sector ended the first quarter on a positive note with a modest expansion recorded in March. […] A key area of concern, however, continues to be rising price pressures. Material shortages were often blamed for the higher costs incurred by firms. A sustained increase in client demand, however, allowed some firms to partially pass on rising expenses. Nevertheless, a strong first quarter places the sector in good stead for a return to industrial production growth in 2021, with our current forecast expecting a 7.1% expansion."

FocusEconomics Consensus Forecast panelists see manufacturing output rising 7.8% in 2021, which is down 0.2 percentage points from the previous month’s estimate. For 2022, the panel expects manufacturing output to increase 5.1%.


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Philippines PMI Chart

Philippines PMI March 2021

Note: Philippines Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month while readings below 50 indicate an overall decrease.
Source: IHS Markit.

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