As the Philippines gradually reopens after more than two months of lockdowns, government officials are reporting “signs of recovery” in the manufacturing sector although second quarter growth figures are likely to be worse than the first quarter.
The National Economic and Development Authority (NEDA), in a statement, cited an increase in capacity utilization to 73.4% in May from 71.2% in April based on the Monthly Integrated Survey of Selected Industries (MISSI) of the Philippine Statistics Authority.
The latest results of the Purchasing Managers’ Index (PMI), 49.7 in June from 40.1 in May, also points to an improved manufacturing performance.
“The low production and sales indices for the manufacturing sector are expected given that most of the country was still on enhanced community quarantine (ECQ) in May. Demand was also subdued as people’s mobility remains limited,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement.
“Despite this, we are seeing some signs of resurgence of the sector. As we transition to a new normal, we expect gradual recovery with improvements in logistics, particularly in the transport of essential goods and raw materials,” he added.
During a press conference on July 8, 2020, Chua also noted that Bureau of Customs (BoC) revenues surpassed the collection target for June. The agency collected P42.54 billion, 4.4 percent more than the P40.74-billion target for the month.
Overall revenue collections in the first half of 2020, however, declined by 16 percent to 1.2 trillion, said Department of Finance Secretary Carlos Dominguez III.
Dominguez, in a virtual forum before the press conference, described the current economic crisis caused by the coronavirus disease 2019 (COVID-19) pandemic as the toughest.
This crisis, which ground the tourism and travel industry to a halt since late January, as well as the Taal Volcano eruption, caused the Philippine gross domestic product (GDP) performance to shrink by 0.2 percent in the first quarter of 2020.
The second quarter performance is expected to be worse as more areas in the country went into lockdown due to the pandemic.
Chua said the economy contracted in May, but there was an improvement from the “deepest contraction in April”.
The economic team is pushing for the further opening up of the regional economies of the National Capital Region, CALABARZON and Central Luzon.
Dominguez, in a meeting with President Rodrigo Duterte on June 29, said these three regions contribute up to 70% of the GDP and should already be placed under modified general community quarantine (MGCQ) to allow more services and industry sectors to resume operations.
The economic team’s recommendation has been adopted by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases in its Resolution No. 50 approved on June 27, 2020.
The team also recommended that government expand testing to include more sectors; reduce positivity rate to 3% by end-July from the 7.1% positivity rate as of June 28; gear towards municipal or barangay-level lockdowns ; and optimize safe public transportation.
Chua said about 75 percent of the economy has reopened while 50% to 60% of public transport has resumed, so far. (Ventures Cebu)