PSA and Nikkei PMI December Manufacturing Data Goes in Opposite Directions

A short note on the government’s manufacturing data.

 

I have frequently harbored suspicions that the Philippine government has been exaggerating their manufacturing data.

For December, the PSA reported that industrial production soared by a blistering 19.4%. (upper right window). This came with the recovery of exports (+4.5%), part of the market for manufacturing output.

Yet as I have been pointing out here, those numbers are meaningless if they are not confirmed by credit growth, a key source of their working capital.

December’s credit growth rate plunged to 6.32%, the lowest since May. Bank lending to the manufacturing sector peaked in September (+12.48%) and has turned lower since (lower window). December credit growth has almost halved the September rate.

Based on Nikkei’s PMI, Philippine manufacturing data fell to 55.7 last December, for a third straight month of decline.

In tandem with credit growth, Philippine PMI peaked in September.

Worst, PMI plummeted to 52.7 last January (upper right window)! PSA has yet to report its January findings

The Nikkei numbers appear to coincide with BSP numbers and not the PSA.

Interestingly, based on reported NGDP, manufacturing output was at 7.8%. But based on the PSA’s industrial survey, the numbers were October 6.3%, November 11.3% and December 19.4% for an average of 12.33%

There seem to be lots of holes in the way the government produces their statistics.

The odd thing here is that everyone seems to swallow hook line and sinker what the government discloses.