MANILA – The outlook for the Philippine manufacturing sector is looking bright this year, according to officials from both private and public sector groups.
In a virtual forum organized by Security Bank, Trade Secretary Ramon Lopez said, while the strict COVID-19 lockdowns have disrupted the sector, it was still able to register its highest purchasing managers' index (PMI) level in 25 months in January and February at 52.5.
A PMI above 50 indicates an expansion of the factory sector while a number below that shows a contraction.
"The positive side to this is, with these kinds of lockdowns that we have, it prioritized basically manufacturing as continuing 100 percent like basic foods, essential product, exports, even IT-BPM, we allowed them 100 percent even in an ECQ set-up," Lopez explained.
And with the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, Lopez noted more foreign investments into this sector are expected in the coming years.
Greg Banzon, chief operating officer at one of the country's biggest tuna canners and processed food manufacturers, Century Pacific Food, said they are also seeing strong demand for their own sector at least for the next five years.
In fact, after reporting a 20 percent growth in 2020, Banzon said, Century Pacific is already seeing a double digit year-to-date growth this year.
"We're very optimistic for, at least for the food sector, and as you've seen in terms of personal care and even on pharma products we're seeing more on stability and slight rebound given that consumers feel a little bit more confident," Banzon said.
Lopez said, other subsectors that have the most potential for foreign investments include the automotive, aerospace, electronics, IT-BPM, and copper/nickel industries.
He added that the local motorcycle production industry is seen leading growth with output already growing 23 percent year-on-year as of January 2021.
"Recent developments in the industry include Yamaha's expansion in Batangas to produce new models in the country, create 1,000 more jobs. Honda will start exporting its motorcycles to New Zealand this quarter and another expansion which includes assembly of bigger bikes to the domestic market, as well as export to China and other ASEAN countries," Lopez explained.
Tomohiro Ando, executive director of Japan External Trade Organization’s (JETRO) Manila team agreed with Lopez.
"Sales and production (of motorcycles) in the Philippines have been increasing before COVID. Very rapidly increasing after 2017," he said.
Aside from the passage of crucial economic measures, Ando said, the Philippines' strong economic growth potential can help attract more investors into the country.
"So the future growth I mentioned even after revised estimates, the growth of the Philippines is still something impressive to the potential investors. And this is one of the effective factors to attract the people overseas to the Philippines," he said.
The Philippine economy failed to climb out of recession in the first quarter of 2021 as it registered a 4.2 percent contraction for the period as the COVID-19 pandemic continued its tight grip on the country.
This follows a 9.5 percent plunge in the country's gross domestic product in 2020, the worst since World War 2.