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MANILA, Philippines - Philippine manufacturing activity has outperformed the global average in the first quarter of this year, according to the research arm of the Philippine Institute of Supply Management.
In a forum last Friday, Dr. Nick Fontanilla, Ascend Inc. managing director, said the Philippines' first-quarter purchasing managers index (PMI) of 55.58 was higher than the global average PMI of 51.13 for the same period.
An indicator of current economic conditions, the PMI tracks five business activities, namely new orders, production, employment, supplier deliveries and inventories. A reading above 50 indicates expansion and one below 50 a contraction.
Fontanilla said this year's first-quarter Philippine PMI was higher than last year's reading of 53.49.
He said this year's first-quarter PMI is the second-highest quarterly reading since the 60.29 in 2010, an election year for the Philippines. The lowest reading was the 44.95 in 2009 following the global financial crisis.
"We expect the economy to be very strong in 2012, probably simulating conditions in 2010, not because this is the year prior to the election, but the fundamentals are really there," Fontanilla said.
The government expects the Philippine economy to expand by five to six percent in 2012 from 3.7 percent last year.
Fontanilla said the Philippine manufacturing sector is expanding despite the euro zone crisis.
Manufacturing activity in the euro zone contracted with a PMI of 48.50.
Last year, East Asia was the Philippines' primary export destination with a value of $22.91 billion, accounting for 47.69 percent of the total.
Philippine exports to the European Union reached only $5.95 billion or 12.38 percent of Manila's total export receipts. The country's major exports to EU countries were electronic products, coconut oil, apparel and clothing, tuna and other products manufactured from consignment.
In the last two years, only Netherlands and Germany were the EU nations that made it to the Philippines' top 10 export destinations with a share of eight percent.
However, the Netherlands, the third biggest source of foreign direct investments in the Philippines, registered a 7.7 percentage points drop to 11.1 percent last year.
Land-based overseas Filipino worker deployment to Europe grew last year, while the Netherlands, United Kingdom, Italy and Malta made it to the top 10 flags of registered seafarer deployment in the last two years.
"While we are indeed affected in some points like trade and investment, not so much in employment, Europe has yet to have a significant effect and we are able to overcome all of the different problems both external and internal,” said Fontanilla.
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