PH manufacturing sector hits record low in March

The Philippine manufacturing sector recorded a record low in March with its Purchasing Managers' Index (PMI) plummeting to 39.7 due to factory shutdowns caused by the COVID-19 pandemic.

This marks the first time the PMI has fallen below the 50.0 threshold, indicating a contraction and a marked deterioration in operating conditions.

The PMI in March 2019 was 51.5, highlighting the severity of the current decline.

IHS Markit attributed the sharp slowdown primarily to the enhanced community quarantine (ECQ) imposed on Luzon island, which forced many manufacturers to cease operations.

Factory shutdowns led to a sharp drop in production and new orders, with employment also declining at the quickest pace in the series history.

Supply chains faltered due to border controls and local travel restrictions, while business confidence weakened and firms cut back on purchases and inventories.

Some manufacturers that remained open experienced significant delays in supplier delivery times, restricting their ability to operate at full capacity.

The Philippines and Singapore posted the largest manufacturing drops in Asean in March, with the Asean's headline PMI plunging to 43.4, the lowest for nearly eight years.

Economists forecast that Asean's manufacturing sector will continue to decline for several months amid the Covid-19 outbreak.