MANUFACTURING output expanded in December 2015 in terms of volume and but value-wise contracted compared to a year earlier.
The National Economic and Development Authority (NEDA) on Wednesday said manufacturing had benefited from increased construction activity and low oil prices.
The Monthly Integrated Survey of Selected Industries recorded 4.9 percent growth in the volume of production index (VoPI), faster than the 4.7 percent seen in December 2014. The value of production index (VaPI), on the other hand, fell by 2.6 percent compared to the 3.2 percent gain recorded 12 months earlier.
Nine out of 13 major industries drove VoPI growth, the Philippine Statistics Authority said. These were non-metallic mineral products (18.8 percent), paper and paper products (18.6 percent), machinery except electrical (17.8 percent), leather products (17.6 percent), miscellaneous manufactures (14.1 percent), transport equipment (13 percent), electrical machinery (12.1 percent), beverages (12 percent) and chemical products (10.4 percent).
Eleven major sectors, meanwhile, reported VaPI decreases, with six dropping significantly: printing (-44.3 percent), petroleum products (-40.6 percent), furniture and fixtures (-27.4 percent), wood and wood products (-21.2 percent), fabricated metal products (-20.8 percent) and textiles (-10.1 percent).
The NEDA said a contraction in both value and volume (2.7 percent and 1.3 percent, respectively) for the food sub-sector was “due to the persistent dry spell brought about by El Niño in the second semester of 2015.”
Petroleum’s decline—33.8 and 40.6 percent in volume and value, respectively—was “due to the weak global demand and oversupply in the world market.”
The average capacity utilization of manufacturing facilities was 83.5 percent in December, of which 55 percent or 11 of the 20 major industries registered rates of 80 percent and above.
“We must continue to help the manufacturing sector realize its potential by creating and strengthening linkages across all production sectors. This will enhance its capacity to absorb labor,” Action Socioeconmic Planning Secretary Emmanuel Esguerra said.
Esguerra, the NEDA chief, pointed out the importance of broadening the scope of supply and marketing linkages to dampen the impact of the El Niño weather phenomenon, which is expected to last up to the middle of this year.
He added that the government must continue to improve infrastructure and encourage businesses to reap the benefits of free trade deals through aggressive information-sharing and simplified bureaucratic processes.
“Smooth flow of goods can be achieved through adequate and resilient road networks, seaports and airports, and reliable telecommunication services. These improvements will enhance the capacity of local players to participate in global value chains,” Esguerra said.
Despite an unfavorable economic global climate, he said the manufacturing sector remained optimistic given low and stable inflation, good employment opportunities and increased consumer spending power.
“The continued drop in petroleum prices will also keep operating costs minimal and this is expected to boost the volume of production,” Esguerra said.