Phl factory output eases in September
Philippine factory output registered a slight improvement in September as investors were encouraged to step up their purchasing activity due to the "elevated" business optimism, Nikkei Inc. said on Tuesday.
The seasonally adjusted Nikkei Philippines Manufacturing Purchasing Managers' Index (PMI) posted a slight gain at 50.8 in September from a record low of 50.6 in September.
While a reading above 50 indicates an expansion, a reading below 50 is equivalent to a contraction.
"[E]levated business optimism encouraged firms to step up purchasing activity in anticipation of higher sales, which led to a further rise in input stocks," the Nikkei report said.
Still, it was the second weakest performance of the manufacturing sector since the Philippines was included in the Nikkei report in January 2016.
"Meanwhile, cost pressures rose noticeably, prompting further price hikes from firms seeking to protect their margins," it said.
Output volumes rose at the weakest rate since January 2016, coupled with reduced overtime work, and input shortages.
"Although order book volumes grew at a rate close to August, the degree of increase remained well below the historical average despite renewed growth in overseas orders," the report read.
Cid L. Terosa, dean of the School of Economics of the University of Asia and the Pacific, noted the likelihood of an improvement in the last three months of the year.
"Firms are preparing for an upsurge in production during the last quarter of the year," Terosa told GMA News Online.
"Also, business confidence has remained upbeat. This has prompted a forward-looking attitude among producers/ manufacturers," he added.
According to the Bangko Sentral ng Pilipinas (BSP), business outlook for the fourth quarter rose to 51.3 percent from 42.7 percent the previous quarter.
"This suggests that growth could accelerate in the last quarter of 2017," it said.