Industrial output sustained its growth in September from a year earlier with production of capital goods contributing largely to the sector’s expansion, the latest Monthly Integrated Survey of Selected Industries (MISSI) released by the Philippine Statistics Authority (PSA) on Thursday showed.
From August, however, manufacturing growth was slightly slower in September.
Nevertheless, Moody’s Analytics economist Jack Chambers said the sector is growing strongly and may continue doing so well into 2017.
“Rapid growth in private consumption, investment, and government expenditure are the main drivers of industrial output,” he said.
The volume of production index (VoPI) grew by 9.9 percent in September from 3-percent a year earlier. It was, however, lower than the revised 13.4 percent growth in August.
The value of production index (VaPI) rose by 5.4 percent from -5.4 percent in the same comparable period, and lower than the revised 8.1-percent expansion the previous month.
The National Economic and Development Authority (NEDA) said the manufacturing sector continued to grow in September 2016 due to sustained increase in capital goods production on strong domestic demand and stable macroeconomic policies.
“This is a sign that our domestic economy is robust and resilient, despite the slow global economic recovery,” Socioeconomic Planning Secretary Ernesto Pernia said in a separate statement.
The NEDA said double-digit growth rates in capital goods came from basic metals (41.0 percent), machinery except electrical (35 percent), and transport equipment (22.3 percent).
“This was backed by the increasing demand for construction-related materials, strong consumer confidence, and high importation of raw materials,” said Pernia.
The average capacity utilization inched to 83.6 percent, with basic metals having the highest utilization rate at 88.5 percent followed by petroleum products at 88.4 percent.
“While this growth is a boon, it is important to note that the average capacity utilization of manufacturing firms barely moved since 2012. This may hamper the sector’s growth in the long-run as it may end up struggling to keep up with the increasing domestic demand,” Pernia said.
“We expect the sector to remain on its upward trajectory during the coming months, as firms anticipate the increase in demand during the approaching holiday season,” the Cabinet official noted.
The NEDA chief stressed the country must foster a culture of innovation, research and development to boost productivity and remain competitive in an increasingly integrated global economy.
“We must ramp up our efforts in providing the economy’s infrastructure needs, particularly for the manufacturing and power sectors, to facilitate the smooth movement of goods and services and attract local and foreign investments,” he added.