Sharp slowdown from 34.3% rise in Jan
PHILIPPINE factory output in volume and in value slackened in February from hefty expansions the previous month, but showed recovery when compared with a year earlier, and exceeded the growth rate predicted by Moody’s Analytics earlier this week, according to the latest Monthly Integrated Survey of Selected Industries (MISSI) released by the Philippine Statistics Authority (PSA) on Tuesday.
The volume of production index (VoPI) in February slowed to 8.4 percent from 34.3 percent in January but reversed the negative growth of 2.1 percent a year earlier.
The value of production index (VaPI) also moderated to 2.8 percent from 26.5 percent in January, but erased the 7.6 percent negative growth in February 2015.
Earlier this week, Moody’s Analytics, the economic research arm of ratings firm Moody’s Investor Service, estimated that February manufacturing output grew at 5.5 percent.
Eight out of 20 major industries drove VoPI growth, the PSA said. Furniture and fixtures increased by 32.4 percent, followed by food manufacturing (26 percent), rubber and plastic products (25.6 percent), fabricated metal products (24.7 percent), machinery except electrical (22.8 percent), printing (22.4 percent), non-metallic mineral products (19.8 percent); and electrical machinery (16.3 percent).
Of the 11 major sectors reporting VaPI increases, four major sectors exhibited two-digit growth: fabricated metal products (27.2 percent); food manufacturing (25.8 percent); printing (22.8 percent); and furniture and fixtures (13.2 percent).
To sustain growth
According to the National Economic and Development Authority (NEDA), the manufacturing sector is expected to sustain growth this year because of the country’s strong macroeconomic fundamentals, resilient domestic consumption, and upcoming national elections.
“There is a positive business outlook due to anticipated increases in gross revenues and net income of some of the country’s largest corporations,” said Socioeconomic Planning Secretary Emmanuel Esguerra.
This scenario, he added, increases the availability of jobs while stable prices of commodities, government assistance such as the Pantawid Pamilyang Pilipino Program (4Ps), and electio n-related spending will also provide an additional boost to domestic consumption.
Meanwhile, NEDA said growth in food production is expected to pick up in the coming months as El Niño is anticipated to weaken and fade away during the second quarter of 2016.
Esguerra, who is also the NEDA director general, said that with low global oil prices, lower production costs would encourage expansion of manufacturing production.
“Thus, to maximize low oil prices, the government must ensure that stable macroeconomic fundamentals are sustained and measures to further reduce the cost of doing business are continually pursued,” he said.
Also, access to high-quality raw materials and reliable energy, logistics and other manufacturing-related services must be available to support robust growth of manufacturing output, he added.
Esguerra also stressed that strategic investments in research and development must be pursued.
The development of new products and services and the improvement of existing ones will enhance the competitiveness of local players in the global market,” he concluded.