Philippines PMI March 2017


Philippines: Manufacturing PMI rises in March

April 5, 2017

The Philippines’ manufacturing industry gathered further momentum in March. The Manufacturing Purchasing Managers’ Index increased from 53.6 in February to 53.8 in March, according to a release provided by Nikkei and IHS Markit. The index thus moved further above the 50-point threshold which separates expansion from contraction in the manufacturing sector.

March’s acceleration came mainly on the back of stronger growth in output and employment. Overall new orders expanded solidly in March, although export order growth lost some strength. Strong growth in new orders led output to grow at the fastest pace so far this year. Employment consequently continued to increase and backlogs of work, thanks to the additional staff, declined.

Regarding price developments and the overall picture, Bernard Aw, economist at IHS Markit, commented: “the March survey points to a further strengthening in the rate of expansion of the Philippines’ manufacturing sector, which bodes well for economic performance in the first quarter. Growth is being driven mostly by robust domestic demand, stemming from buoyant consumers and public infrastructure spending in particular. Export growth remained modest, helped by a stronger US dollar. However, the weaker exchange rate means that prices for imported inputs continued to be more expensive than before. Firms were able to pass on much of the higher costs to customers as demand for Filipino goods remains strong. However, the manufacturing sector was not performing as well in the first quarter as it had in the fourth quarter of last year. Although if recent sectoral improvements continue, especially with increased government spending and resilient private consumption underpinning the economy, we could see stronger growth in the months ahead.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 5.9% in 2017, which is down 0.5 percentage points from the previous month’s estimate. For 2018, the panel expects manufacturing to increase 5.9%.

Author: Massimo Bassetti, Economist

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Philippines PMI Chart

Philippines PMI March 2017

Note: Nikkei Indonesia Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.
Source: Nikkei and IHS Markit.

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