The Nikkei ASEAN Manufacturing Purchasing Managers’ Index of IHS Markit, a global provider of critical information, analytics, and solutions, reported Thursday that the Philippines has posted the highest Manufacturing PMI in Southeast Asia for the month of August.
The survey showed that the Philippines posted Manufacturing PMI at 55.3 last month.
PMI is an indicator of manufacturing sector’s health based on sub-components such as new orders, output, employment, suppliers’ delivery times, and stocks and purchases.
Indices above 50 signal improvement in business conditions while readings below 50 show deterioration.
Although the report noted that the figure for the Philippines was in its five-month low, the country’s Manufacturing PMI is stronger than Vietnam’s index at 55.2, Indonesia with 50.4, Singapore with 50, Thailand with 49.8, Malaysia with 47.4, and Myanmar with 47.2.
“Conditions in the Filipino manufacturing sector continued to improve in August, again driven by sharp expansions in both new orders and output,” said IHS Markit Economist Alex Gill.
IHS Markit survey also noted “sharp expansion” of new businesses in the Philippine manufacturing sector with growth rate in August recording the second highest since the January.
“With employment rising overall and buying activity increasing, it is likely that companies will remain in expansion mode in coming months,” Gill added.
“The strong August Manufacturing PMI for the Philippines continues to reinforce the strong growth outlook for the Philippines economy in the second half of 2016,” IHS Markit Asia Pacific Chief Economist Rajiv Biswas told the Philippines News Agency in an e-mail.
IHS Markit has forecasted that the Philippine economy will expand 6.5 percent for 2016, becoming one of the fastest growing emerging markets in the world.
“A key role for government policy will be to improve the business landscape and improve the ease of doing business, in order to drive foreign direct investments (FDIs) into the Philippines’ manufacturing sector,” said Biswas.
“Government policy efforts could catalyze stronger FDI into other sectors of manufacturing including electronics and food processing, which could help to stimulate manufacturing jobs growth,” he added.