Double-digit growth driven by 300% increase in chemical products
MANUFACTURING output in the first month of 2016 surged from a year earlier, growing a hefty 34.3 percent from 2.6 percent in the volume of production index (VoPI) and 26.5 percent from the 1.1 percent decline in the value of production index (VaPI).
The huge gain was led by the over 300 percent increase in the volume and value of chemical products, according to the latest Monthly Integrated Survey of Selected Industries (MISSI) released by the Philippine Statistics Authority (PSA).
Eight out of 20 major industries drove VoPI growth, the PSA said. Chemical products increased by 312.4 percent, followed by tobacco products (49.4 percent), machinery except electrical (23.6 percent), food manufacturing (20.2 percent), electrical machinery (19.2 percent), beverages (10.1 percent), rubber and plastic products (2.9 percent), and footwear and wearing apparel (1 percent).
Six major sectors, meanwhile, reported VaPI increases. Chemical products posted a 309.6 percent gain, with tobacco products (49.6 percent), food manufacturing (19.1 percent), beverages (11.7 percent), machinery except electrical (8.7 percent), and electrical machinery (4.8 percent) all gaining in value.
Stronger growth seen
NEDA said the manufacturing sector is expected to grow more strongly for the year ahead, after managing only moderate growth in 2015 due to weak global demand and adverse weather conditions.
Socioeconomic Planning Secretary Emmanuel Esguerra said a bullish business outlook is anticipated for the second quarter of 2016 on the back of higher election-related spending activities and the rollout of infrastructure projects.
“Continued implementation of projects under the public-private partnership and stronger domestic demand during the summer season will further support the growth in manufacturing sector,” said Esguerra, who is also NEDA director general.
Petroleum weakness persists
Despite the growth in other commodities, NEDA pointed out that petroleum continued to wane, contracting by 35.1 percent and 33.7 percent in volume and value of production in January due to the continuing decline in global demand and the ample supply of diesel in the Asian market.
“The continued decline in oil prices is a double-edged sword that may increase our local production but also may spell displacement of some of our overseas Filipino workers, which in turn could affect the inflow of remittances,” the NEDA chief said.
The average capacity utilization of manufacturing facilities was 83.5 percent in January, of which 55 percent or 11 of the 20 major industries registered rates of 80 percent and above.
NEDA said government must remain vigilant as risks to growth remain.
“Slow recovery in advanced economies and economic slowdown in large emerging economies will continue to put pressure on the growth of international trade. On the domestic front, risks brought about by prolonged dry spell due to El Niño remain a challenge,” said Esguerra.
He added that to enhance the capacity of the manufacturing sector and generate quality employment, efforts to boost productivity must be pursued.
“We must continuously push for innovation. The country must be able to develop new products, especially those with linkages to agriculture and aquaculture, which will create opportunities for the greater number of our population to partake in the benefits of growth,” said Esguerra.