The Department of Trade and Industry said over the weekend the economic recovery is now in full swing, as a leading gauge of manufacturing output climbed to 53.2 in March, the highest in three years and the best in Southeast Asia, following greater mobility and effective implementation of health and safety protocols.
“The surge of the Omicron variant dampened our recovery expectations at the start of the year but with the lesser and lesser COVID-19 cases in February and March, all signs point to a full recovery in full swing starting March and in the coming months,” said Trade Secretary and Board of Investments chairman Ramon Lopez.
The manufacturing output, through the Purchasing Managers’ Index of the IHS Markit Philippines, climbed to a three-year high of 53.2 in March 2022. An index above 50 means it is on an expansion mode.
“With this, we expect a robust first-quarter gross domestic product performance and for manufacturing PMI to again signal expansion in April. Still on the brighter side, manufacturing output for the whole of 2021 capped a solid year marked by nine straight months of growth culminating in December,” Lopez said.
The Philippine Statistics Agency reported that 11 industries grew in December, including wood, bamboo, cane, rattan articles and related products which attained a 122.6-percent expansion year-on-year.
Other gainers in December were the manufacture of machinery and equipment and electrical which botth grew by 50 percent. Other industries recorded double-digit growth such as coke and refined petroleum products at 48 percent; computer, electronic and optical products at 27 percent; non-metallic mineral products, 37 percent; food products, 32 percent; and fabricated metal products, 40 percent.
About a fourth of factories were at the full-capacity operation, Lopez said.
The growth in the value of production index posted an increase of 18.6 percent in December, up from 27.2 percent in November. For the full year 2021, VaPI increased by 47 percent, a turnaround from the 43-percent contraction in 2020.
“The nine-month run expansion of manufacturing output played a key role in pushing our economic growth to 5.6 percent for 2021, above our target of 5 to 5.5 percent. By capping its run until the end of the year ushered a strong 7.7-percent GDP growth in the last quarter,” said Trade Undersecretary and BOI managing head Ceferino Rodolfo.
The growth in the manufacturing sector was supported by the surge foreign direct investment net inflows which reached an all-time high of $10.51 billion in 2021, or 54.2 percent higher than $6.82 billion in 2020, according to the data from Bangko Sentral ng Pilipinas.
The 2021 net FDIs also surpassed the government projection of $8.5 billion.
“The growth in FDI reflected continued positive foreign investor sentiment on the country amid expectations of a rebound in domestic economic activity and declining COVID-19 reported cases, as well as the strengthening of the global economy,” Rodolfo said.
Foreign investment commitments recorded by the BOI amounted to PP151.8 billion last year, up by 218 percent from the 2020 figure.
“The record-breaking FDIs figures in 2021 will provide the momentum in stepping up our FDI generation for this year as foreign investors remain unfazed amid the pandemic by channeling more capital inflows into the country,” Rodolfo said.
Lopez said with the CREATE Act in full implementation and the recent signing of three major economic reforms such as the amendments to the Retail Trade Liberalization Act, the Foreign Investments Act and Public Service Act, complemented by the “Make It Happen in the Philippines” campaigns and strategic investment promotion missions, more investments are expected to come in.
“There are major investment projects in the pipeline and we will be on our way up towards higher foreign investment levels, which will generate more employment opportunities for the Filipino people,” said Lopez.