Sept value contracts 4.8%, reversing 5.5% yr-ago growth
Manufacturing output growth slowed in September and value-wise contracted from a year earlier, the government reported on Tuesday, but a Cabinet official expressed optimism of a rebound given the upcoming holidays and preparations for next year’s national elections.
The Philippine Statistics Authority (PSA) said data from its Monthly Integrated Survey of Selected Industries (MISSI) showed the volume of production index (VoPI) growing by 3.5 percent during the month, slower than the 4.7 percent recorded in September last year.
The value of production index (VaPI), meanwhile, declined by 4.8 percent—a reversal from the 5.5 percent gain recorded 12 months earlier.
The PSA said 12 industries, seven of which had posted double-digit growth, had pulled up the VoPI. The seven were: tobacco products (35 percent), electrical machinery (21.4 percent), footwear and wearing apparel (13.5 percent), machinery except electrical (12.8 percent), textiles (12.6 percent), transport equipment (11.8 percent), and other miscellaneous manufactures (11.1 percent).
Nine industries, meanwhile, were behind the VaPI drop, led by furniture and fixtures that fell by 39.1 percent and followed by wood and wood products (down 30.1 percent).
The average capacity utilization of manufacturing facilities in September was 83.4 percent, of which 55 percent or 11 of the 20 major industries registered utilization rates of 80 percent and above.
“We expect the manufacturing sector to further gain strength due to the holiday season and the approaching May 2016 elections. This makes business leaders anticipate increased orders and sales, which will boost both the production and sales of manufactured goods,” Socioeconomic Planning Secretary Arsenio Balisacan said.
“Also, with an improved pace of government spending, low production costs, declining oil prices and the steady inflow of remittances from overseas Filipino workers, this will form a favorable growth momentum of the manufacturing sector for 2016,” he added.
Noting value and volume declines among sectors, Balisacan said: “We must strengthen the linkages of all production sectors through the implementation of the Comprehensive National Industrial Strategy that will guide the effective integration of the agriculture, industry and services sectors to ensure sustained growth and resiliency of the economy to external and internal shocks.”
He also pointed out that micro, small and medium enterprises should be empowered through capacity building and improved access to financing.
Balisacan noted the need for increased domestic consumption, pointing out that net sales of basic metals had continued to decline amid weak demand from China.
“To minimize the adverse effects of uncertainties in the global market, we need to boost domestic consumption to compensate for possible losses in exports,” he said.
“We also need to explore new segments of global value chains, products, and markets that will enable the domestic economy to maximize potential gains from the ASEAN economic integration and from the eventual recovery of the global market.”