RCBC chief economist Michael Ricafort
MANILA – Further reopening of the domestic economy and easing of quarantine level to modified general community quarantine (MGCQ) nationwide in the coming months are expected to further lift the manufacturing sector.
This, after Markit’s manufacturing Purchasing Managers Index (PMI) for the Philippines remains steady at 52.5 in the second month this year.
In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the latest PMI is the highest in more than two years or since December 2018, and a reversal of the 49.2 print in December 2020.
“(It is) a pleasant surprise since it is slightly higher/better vs.52.3 a year ago or in February 2020 or shortly before the Covid-19 lockdowns/pandemic; a leading indicator that could suggest further pick up in business/economic activities for the second straight month of 2021 as sustained even after the Christmas season in December 2020,” he said.
A PMI index of above 50 indicates expansion while an index of below 50 means contraction.
Ricafort said the possible easing of the quarantine level in the remaining areas under GCQ, like the National Capital Region (NCR), will result in “higher capacity for many businesses/industries, which may lead further pick up in manufacturing activities as well.”
Citing news reports, he said a shift to MGCQ will only be allowed if the supply of coronavirus disease (Covid-19) vaccines has reached 2 million and rollout continues.
On Monday, the government launched its inoculation program using part of the 600,000 doses of Sinovac-produced CoronaVac, which were donated by China.
Among those that were given the vaccine are UP-PGH Director Dr. Gerardo Legaspi, Dr. Edsel Salvaña, Director of the Institute of Molecular Biology and Biotechnology at UP-National Institutes of Health; and Covid-19 testing czar Vince Dizon.
“Further reduction in new Covid-19 cases could be helped further by the rollout of Covid-19 vaccines in the coming months of 2021, as well any further confirmation on the effectiveness of existing Covid-19 vaccines to control the new variants/strains that are more contagious, would help improve sentiment on economy, thereby allowing more businesses and people to work and also support more economic activities that result to increased spending/consumption, which also help fundamentally boost manufacturing activities,” Ricafort added. (PNA)
