THE Philippines emerged as one of the countries in the region with the strongest growth in the manufacturing sector in August, as the country’s Purchasing Managers’ Index (PMI) bucked the regional trend of weak trade and production in recent months.
Data compiled by HSBC showed the Philippines had the highest PMI in Asia Pacific in August, despite the slight dip from the previous month.
The PMI is a composite index, calculated as a weighted average of five individual subcomponents. The components include new orders—which weigh the most at 30 percent of the index; output, which is 25 percent of the index; employment, 20 percent; suppliers’ delivery times, 15 percent; and stocks of purchases, 10 percent.
On Thursday regional business media organization Nikkei announced the first public release of data collected from the new monthly survey of business conditions in the Filipino manufacturing sector.
The maiden release of results showed the headline seasonally adjusted PMI registered 55.3 in August.
Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show deterioration.
The above-50 PMI recorded in August was attributed to strong expansions in new orders and output. However, the headline seasonally adjusted PMI in August was down from the 56.3 seen in July.
“The Philippines is on a roll: Although the headline manufacturing PMI eased in August, it remains comfortably in expansion territory,” HSBC said, adding that the strong PMI of the Philippines, along with Indonesia’s better reading, helped push the aggregate PMI of the region back above the expansion territory.
In particular, data compiled by the international bank showed the Philippines is among the five economies monitored by HSBC that has a PMI above 50.
China’s PMI is at 50.4, while India’s was at 52.6 and Indonesia at 50.4.
Taiwan’s was at 51.8 and Vietnam’s was at 52.2. These were all lower, compared to the strong 55.3 PMI of the country seen in August.
Contrasting this expansion were countries registering a below 50 PMI—including Japan, Korea, Malaysia and Thailand. The aggregate PMI for the Asean is at 50.3.
