Output low on weak electronics demand – MAP
Credit to Author: TYRONE JASPER C. PIAD| Date: Fri, 10 May 2019 16:18:38 +0000
The lower production in the country’s manufacturing sector could be attributed to the ‘less-than-stellar’ demand for electronics products due to the ongoing trade spat between the United States and China, the Management Association of the Philippines (MAP) said.
“The recent decline in manufacturing can be attributed mainly to external factors, in particular the decline in demand for electronic components, which make up over half our exports. This is mainly due to weak China exports due to the trade dispute between China and the US,” MAP President Rizalina Mantaring told The Manila Times.
An IHS Markit/Nikkei survey said the seasonally adjusted Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 50.9 in April from 51.5 a month ago.
The drop in PMI, which was attributed to lack of raw materials, indicates that the output of the country’s manufacturing sector declined, along with its new export orders. PMI takes into account the weighted average of new orders, output, employment, suppliers’ delivery time and stocks.
As of end-March, Philippine Statistics Authority (PSA) data show electronics exports dropped 1.7 percent to $8.8 billion from $8.95 billion in the same period a year ago. Accumulated electronics export figures represent 54 percent of the total outbound shipments in the first quarter.
Despite lower production, the MAP chief is upbeat a turnaround will happen to lift the sector. “We are hopeful that this will be resolved soon, as reports seem to indicate a resumption of robust export orders,” she said.
Mantaring stressed the importance of increasing the country’s manufacturing base to boost productivity and “avoid over-reliance on the electronics sector.” “We also need to invest in manufacturing technology to improve productivity,” she added.
The PSA also reported that factory output plunged in March in terms of volume and value. Its Monthly Integrated Survey of Selected Industries indicated that the volume of production index slumped to -9.2 percent in March.
Meanwhile, the value of production in March went down by 5.4 percent from last year’s 10.5-percent expansion but slightly improved from February’s 5.5-percent decline.
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