THE PHILIPPINES’ MANUFACTURING SECTOR has long established itself as one of the “bread and butter” industries of the country. Comprising of almost half of the overall industrial sector, it provides more jobs than any other industry, including the agricultural and services sector. The industry also plays a huge role in helping boost the growth of the country’s Gross Domestic Product (GDP), and is one of the many reasons why its recent growth during the second quarter of 2018 has been a welcome sight to both factory owners and their workers.
The Manufacturing Industry Comes Out Swinging
Rebounding from its slow start in March, factory growth showed mark improvement this May by dishing out its highest Purchasing Managers Index (PMI) reading for demand, output and order growth. The initial IHS Markit tracking survey conducted by Nikkei last April already saw the country’s PMI reading rise up to 52.7 in April from its initial 51.5 reading in March, putting us in a tie with Vietnam as having the second best factory growth in the ASEAN. That all changed in May when the recent growth hit an all-time high at 53.7. The current reading is promising since anything above a rating of 50 is a sign of economic expansion.
Factories have attributed the latest growth to high demand from customers, resulting in its highest production output thus far. The latest growth has also encouraged companies to expand their business and increase production to help boost their inventories. All these improvements have come despite most manufacturing firms facing different economical challenges including global price hikes of commodities, adjustment to the country’s latest tax reform program, and a weak exchange rate.
The current growth experienced by manufacturing firms isn’t just a godsend for them, it’s also a blessing to multitudes of Filipinos currently toiling the employment line. With its recent upswing, factory owners have now zeroed in on expansion to boost production and meet customer demands. As a result, manufacturing companies have now opened their doors to bring in more workers to help speed up production and reduce any backlogs that could come from increased customer demand.
More Growth Means Better Opportunities in the Long Run
Should this upward trend continue at its current pace, manufacturing firms will be able to generate more revenue that will allow them to further improve the quality of their output, while also giving them the necessary funds to build a safer and more efficient work environment for their workers.
Aside from product quality and improvements in the workplace, continuous growth means more jobs and better compensation, something that most workers in the industry have failed to receive. It also reduces the chances of qualified workers looking for jobs overseas and being separated from their families.
Lastly, a continuous uptick in factory growth should provide some much needed assistance for the government’s development plans, something we’re all aching for.
At the end of the day, although factory owners still have to contend with rising inflation costs and adjust to new tax regulations, the fact that the manufacturing industry was able to experience continuous growth – and bring in good business despite these challenges – is a testament that the government’s latest attempt on economic reform is slowly headed into the right direction.
Chin up, Philippines.