Factory output — both in volume and value terms — slumped in September on the back of declines in the production of petroleum products, transport equipment and export-oriented goods, the government reported on Friday.
The volume of production index (VoPI) fell by 3.7 percent while the value of production index (VaPI) dropped by 4.3 percent, the Philippine Statistics Authority (PSA) said, reversing from August’s revised 1.6 percent and 1.2 percent gains, respectively.
Both VoPI and VaPI grew by 11.2 percent and 5.9 percent, respectively, a year earlier.
The National Economic and Development Authority (NEDA), in a separate statement, said it was optimistic of a rebound in the last three months of the year given increased consumer confidence and improved business sentiment.
“The Consumer Expectation Survey of the Bangko Sentral ng Pilipinas reported high consumer outlook optimism for the fourth quarter, with respondents expecting additional income, employment opportunities, and improvement in the peace and order of the country,” NEDA Undersecretary Rosemarie Edillon said.
She added that 2017 APEC CEO Survey results showed that Philippine top corporate officers and business specialists were “very confident” about revenue growth in the next 12 months and are more likely to increase their investments in the country.
The decrease in the production of petroleum products was attributed to lower output of coke and other fuel products, while the contraction in transport equipment followed lower imports of raw materials, the NEDA said.
For export-oriented products, declines were seen in the production of textiles, footwear and wearing apparel, chemicals, rubber and plastic, and wood products.
Production continued to grow, however, in construction-related manufactures and food manufacturing, it said.
Edillon said efforts to enhance the ease of doing business in the country needed to be pursued to attract more investments in the manufacturing sector.
“Elimination of redundancy in the process and lowering the cost of doing business is expected to attract new entry players and expand existing firms,” she said.
A comprehensive credit information system also needs to be developed to help financial institutions make more informed lending decisions, particularly those related to cooperatives and micro and small enterprises.
Edillon said this should go hand in hand with efforts to implement an effective incentives system to attract more multinational manufacturers and parts suppliers.