The Philippine Statistics Agency (PSA) said in a report that manufacturing output was reduced to base metals at its three-month low in June and contractions in cola and refined petroleum products.
Preliminary results from the latest comprehensive monthly survey of PSA for Selected Industries (MISSI) show that plant output is measured, with production index volumes increasing by 2.2% in June.
Reading speeds in June were slower than the revised 3.4% in May and 3.8% in June last year. This is also the slowest growth since a 0.8% decline in March.
In the first semester, the average growth rate of factory output was 1.4%, slower than the average for the same period last year.
Monthly, June output signed 4.7%, reversing from 2.6% in May. Stripping seasonal factors, down 2.5%.
According to PSA, the slowdown in factory output in June was due to a sharp annual decline in base metals (-23.2% in June from-12.5% in May), cola and refined petroleum products (-6.1%-12%), and chemicals and chemicals (-14.7%) (-9.9%).
The other five sectors recorded a decline, while the remaining 14 divisions expanded.
PSA said the top three that contributed to VOPI’s overall growth throughout the year were food (up to 15.5%), transportation equipment (14.8% of 13%), and computer, electronics and optical products (4.8% of 5%).
By comparison, the Philippines expanded by 50.7 in June at 50.1 in May, the strongest pace in two months.
PMI is a major indicator of factory activity, reflecting the amount of material purchased before manufacturing operations for weeks or months. Readings above 50 separate expansion and contraction.
CID L. Terosa, senior economist at Asian University and Pacific University, said growth in factory output, especially the slowdown in three industries, can be traced back to more expensive import output due to global trade uncertainty.
“Demand for locally manufactured goods appears to continue to decline with lower inflation, despite being slower than in previous months,” Mr Terosa said in an email.
“Many exporters and manufacturers, from May to June, slowed down slightly, and then they announced (tariffs) because they were afraid it would expand,” said Sergio R. Ortiz-Luis, chairman of the Philippine Chamber of Commerce and Industry.
“We will certainly increase to some extent, but affected by Trump’s tariffs,” he said in a mixed phone interview in the Philippines and English.
In April, U.S. President Donald J. Trump announced a reciprocal tariff rate of 17% on Filipino goods, but the implementation was suspended until July.
But in early July, he raised the tax to 20%. Trump and Philippine President Ferdinand R. Marcos (Ferdinand R.
“Tariffs may lead to a decline in manufacturing exports. Electronics and semiconductor exports account for more than 50% of our exports to the U.S. market and may not be affected much, as electronics products are already covered by the WTO (World Trade Organization) Information Technology Agreement,” Mr Terosa said.
For Nicholas Antonio T. Marca, chief economist at Metropolitan Bank and Trust.
“Another challenge is the recently announced 100% tariffs on electronic products entering the U.S., which could undermine the demand for electronic exports in the Philippines,” he said in a Viber message.
Marites M. Tiongco, dean of the School of Economics at De La Salle University, said the country must diversify export destinations to “reduce the risk of concentrated U.S. markets.”
Looking ahead, Mr Terosa marks the impact of U.S. reciprocity tariffs, weak peso and ongoing geopolitical tensions as emerging risks may dampen manufacturing in the country.
Manufacturing accounts for nearly 20% of the country’s GDP. – Heather Caitlyn Menagor
