Factory output remains weak in January- PSA

MANILA, Philippines — Factory output remained weak in January as 11 major industry groups reported a decline in production, the Philippine Statistics Authority (PSA) said.

In its Monthly Integrated Survey of Selected Industries (MISS) for January, PSA reported that the Volume of Production Index and Value of Production Index declined by 1.6 percent and 6.3 percent, respectively, during the month.

This, however, is a slower decline compared with the 9.1 percent and 8.7 percent contractions, respectively, in December 2019. Year-on-year, this compares with the 4.2 percent and 0.3 percent contractions, respectively, in January 2019.

Diminished production were seen for petroleum products, electrical machinery, basic metals, miscellaneous manufactures, tobacco products, transport equipment, paper and paper products, wood and wood products, textiles, furniture and fixtures, and non-metallic mineral products.

Socioeconomic Planning Secretary Ernesto Pernia said the recent eruption of the Taal Volcano in Batangas will continue to have a temporary impact on the manufacturing sector as the CALABARZON region accounts for about 31 percent of the country’s industry output.

Thus, over the immediate term, government will need to fast track the rehabilitation of public infrastructure to ensure speedy recovery of firms, establishments, and households located in the affected areas.

Concerns over the spread of the coronavirus disease (COVID-2019) affecting tourism and travel activities in the country could also reduce the production of consumer-related manufactures such as food and beverages, especially those that export their goods.

“Intensifying government’s actions to monitor and implement mitigating measures will temper the potential negative impact of the COVID-2019 on the manufacturing industry,” said Pernia.

“Government needs to work closely with the industry in crafting and implementing strategies to effectively mitigate the possible impacts of COVID-19 on production.”

Pernia said that there is also a need to map out entire value chains across primary, secondary, and tertiary players in the economy to understand where critical parts are sourced, to identify alternative market sources, and to beef up inventory capacity to insulate against vulnerabilities.

“To help the manufacturing industry become more competitive and resilient, relevant government agencies need to swiftly implement measures that would streamline processes, facilitate trade, and reduce transactions costs,” he said.