MANUFACTURING output expanded in November, both in terms of volume and value but at a slower pace compared to a year earlier.
The National Economic and Development Authority (NEDA) on Tuesday said manufacturing’s positive performance could have driven overall fourth quarter growth for the sector.
The Monthly Integrated Survey of Selected Industries recorded 7.5 percent growth in the volume of production index (VoPI), slower compared to the 9.1 percent rise in November 2014.
The value of production index (VaPI), meanwhile, picked up by 1 percent, also slower than the 6.9 percent gain recorded 12 months earlier.
The Philippine Statistics Authority said seven of 11 major industries mainly drove VoPI growth. These were tobacco products, which grew by 52.7 percent, machinery except electrical (29.6 percent) basic metals (25.1 percent), leather products (23.7 percent), electrical machinery (20.1 percent), petroleum products (12.5 percent) and footwear and wearing apparel (12 percent).
Of the 15 major sectors that reported VaPI increases, four significantly contributed: tobacco products (54.1 percent), machinery except electrical (32.5 percent), leather products (24.9 percent) and basic metals (11.3 percent).
The food sub-sector continued to decline in both volume and value, registering a contraction of 10.0 in volume and 9.8 percent in value.
“This . . . [was]triggered by the low demand for tuna products, low supply of agar and inadequate supply of raw materials for the production of vegetable and animal oils,” Socioeconomic Planning Secretary Arsenio Balisacan said.
The transport sector grew by 9.5 in volume and 8.7 percent in value due to sustained passenger and commercial vehicle sales, he also said.
The average capacity utilization of manufacturing facilities was 83.6 percent in November, of which 55 percent or 11 of the 20 major industries registered utilization rates of 80 percent and above.
Balisacan, who is the NEDA director general, said growth in manufacturing despite weak global demand underlined the resiliency of the domestic economy.
“This could also potentially support stronger fourth-quarter 2015 growth of the industry,” he said, adding the sector was expected to have grown further in December on the back of robust domestic demand, increased remittances, stable inflation and low fuel prices.
The NEDA chief said the Philippines should aggressively pursue efforts to encourage innovation to help the manufacturing sector realize its potential.
“We have to explore and invest in new technology to enhance existing product base to maintain competitiveness in the regional and global market,” he said.
Balisacan added that the government also needed to raise the productive capacity of micro, small and medium enterprises by upgrading skills and improving access to financing.
He noted that the business sector was expected to benefit from the realization of the Association of Southeast Asian Nations (Asean) Economic Community (AEC), which is expected to accelerate investments, create additional employment and generate more income.
“To fully benefit from Asean economic integration, the government needs to improve the business climate by amending restrictive legislation and simplifying complicated business-related processes and regulations,” he said.