Manufacturing sector turns around with 8.4% growth in February

MANILA, Philippines – The country’s manufacturing sector grew 8.4 percent in February, reversing the 2.1 percent contraction in the same period last year, the Philippine Statistics Authority (PSA) reported yesterday.

The growth in the agency’s Volume of Production Index (VoPI) was led by significant increases in the manufacture of food, rubber and plastic products, fabricated metal products, machinery except electrical, printing, non-metallic metal products and electrical machinery.

The Value of Production Index (VaPI) also registered a turnaround, growing 2.8 percent, rebounding from a 7.6 percent fall in the same period last year.

Growth in production value was seen the most in fabricated metal products, food, printing, furniture and fixtures. PSA noted the printing and the furniture and fixtures industries recovered following six and 13 consecutive months of decline, respectively.

Factories operated at an average capacity utilization rate of 83.3 percent in February. Eleven of the 20 major industries operated at above 80 percent capacity. These are basic metals, petroleum, non-metallic minerals, machinery except electrical, food manufacturing, electrical machinery, paper and paper products, chemical products, rubber and plastic products, wood and wood products, and printing.

The National Economic and Development Authority (NEDA) said the local manufacturing sector would sustain growth this year because of the country’s strong macroeconomic fundamentals and the traditional spike in consumption during the 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 and NEDA director general Emmanuel Esguerra.

Increased purchasing power brought about by the greater availability of jobs and government conditional cash transfer coupled with stability in the prices of commodities is also expected to boost consumption.

Esguerra also said low global oil prices would also drive down production costs, therefore encouraging expansion of production.

 “Thus, to maximize low oil prices, the government must ensure that stable macroeconomic fundamentals are sustained and measures to further reduce cost of doing business are continually pursued. 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 said.

Esguerra added that strategic investments in research and development must be pursued as the development of new products and services and the improvement of existing ones would enhance the competitiveness of local products in the global market.