Philippine Manufacturing Sector Continues to Grow in March 2023, Despite Global Supply Chain Disruptions

Despite ongoing global supply chain disruptions caused by the pandemic, the Philippine manufacturing sector continued to grow in March 2023. According to data from the Philippine Statistics Authority (PSA), the sector’s value of production index (VaPI) recorded a year-on-year growth rate of 4.9 per cent in March, although at a slower pace compared to the previous month and the same period last year.

The volume of production index (VoPI) also saw a less robust increase of 2.2 per cent in March compared to 5.2 per cent in February. Despite this slowdown, the manufacturing sector’s average capacity utilization rate in March was 73 per cent, slightly higher than February’s 72.7 per cent. The PSA’s survey revealed that 21.7 per cent of establishments surveyed operated at full capacity, 38 per cent at 70-89 per cent capacity, and 40.3 per cent below 70 per cent capacity.

The manufacturing industry is a significant driver of the Philippine economy, contributing to the country’s overall growth and providing employment opportunities. The industry’s contribution to the Philippine gross domestic product (GDP) has been steadily increasing over the years, with a share of 23.5 per cent in the fourth quarter of 2022.

Experts attribute the slower growth rate to the ongoing global supply chain disruptions caused by the pandemic. The disruption of raw materials and intermediate goods delivery, particularly from China, has slowed down the production process of many manufacturers in the Philippines. Moreover, the recent surge in Covid-19 cases in the country, leading to lockdowns in some areas, has further complicated the situation.

Despite the challenges faced by the industry, there are opportunities for growth. The government has been actively promoting investments in the manufacturing sector, particularly in high-value-added industries, to increase exports and boost economic growth. The Philippines has a young and educated workforce, making it an attractive destination for investors looking to expand their businesses.

In conclusion, the Philippine manufacturing sector continued to grow in March 2023, albeit at a slower pace. Despite the challenges posed by global supply chain disruptions caused by the pandemic, the industry remains a crucial part of the Philippine economy, providing employment opportunities and contributing to the country’s overall growth. With concerted efforts by the government and private sector, the industry’s growth potential can be unlocked, creating a brighter future for the Philippine economy.


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