INDUSTRIAL output surged in October from a year earlier, boosted by petroleum products, the latest Monthly Integrated Survey of Selected Industries (MISSI) released by the Philippine Statistics Authority (PSA) on Friday showed.
Compared with September, the manufacturing sector grew at a slightly slower pace.
IHS Markit chief economist Rajiv Biswas said the strong industrial output reflects the rapid expansion of the gross domestic product and higher domestic demand in the fourth quarter.
“The buoyant performance of the manufacturing sector was boosted by continued rapid growth in private consumption expenditure. This has resulted in double-digit growth in the value of production for a number of key manufacturing industries, with food manufacturing up 16.8 percent, beverages up 12.1 percent and transport equipment up 17.7 percent,” he said.
On the other hand, the latest Nikkei Philippines Manufacturing PMI by IHS Markit signaled a strong manufacturing upturn in November, as robust demand resulted in higher production and total new orders.
The volume of production index (VoPI) grew by 8.4 percent in October from 1.5 percent a year earlier. It was, however, slower than the revised 9.2 percent in September.
“This may be attributed to the increases in 50 percent of the 20 major sectors with significant contribution of four heavily weighted sectors namely: petroleum products (37.0 percent), machinery except electrical (24.4 percent), transport equipment (19.4 percent) and food manufacturing (14.3 percent),” the PSA noted.
The value of production index (VaPI) rose by 4.3 percent from -6.2 percent in the same comparable period, but was lower than the revised 5 percent in the previous month.
“This increase in VaPI was due to the two-digit growth observed in four major sectors, outpacing the two-digit decreases reported by six major sectors,” the PSA said.
It added that major sectors that reported significant were petroleum products (29.0 percent), transport equipment (17.7 percent), food manufacturing (16.8 percent) and beverages (12.1 percent).
“To support the manufacturing sector’s growth, the government efforts to improve the business climate must be sustained,” Socioeconomic Planning Secretary Ernesto Pernia said in a separate statement.
Pernia, the concurrent director general of the National Economic and Development Authority (NEDA), said the sector is expected to benefit from the industrial strategy of the Department of Trade and Industry, which focuses on industries with potential to generate employment and encourage entrepreneurship.
“With the Duterte administration’s commitment to fast-track implementation of infrastructure projects and programs, construction-related manufactures will be a major contributor to growth of the sector,” he said.
Better infrastructure will stimulate the expansion of the manufacturing sector further, as well as more easily connect producers to the value chain, and then to local and international markets, according to the Cabinet official.
“To raise the local industries’ competitiveness in the increasingly integrated global economy, we need to increase both public and private investments in R&D. This will surely help in the exploration and development of new products, processes, and markets,” he added.