PH manufacturing output accelerates in April
FACTORY output — both in volume and value terms — continued to accelerate in April with the expansion also faster compared to a month earlier, the Philippine Statistics Authority (PSA) reported on Tuesday.
The volume of production index (VoPI) grew by 31.1 percent in April, up from 16.5 percent in March and a reversal of the 1.6-percent contraction recorded a year ago, based on results of the PSA’s latest Monthly Integrated Survey of Selected Industries.
The value of production index (VaPI) climbed by 31.7 percent from 0.1 percent year on year and from March’s 15.8 percent.
The National Economic and Development Authority (NEDA) said higher commodity prices, strong consumer demand and a weaker exchange rate encouraged manufacturers to produce more in April.
In a statement, the NEDA said the April VoPI and VaPI results improved the three-month moving average growth rate of both indexes to 23.3 and 23.0 percent, respectively.
Growth in the production of food and export-oriented products such as processed food, chemicals, fabricated metals, leather, petroleum, non-metallic minerals, electrical and non-electrical machinery, among others contributed to the gains, it noted.
The NEDA said higher government spending on infrastructure in the months leading to April helped sustain growth in construction-related manufactures, which continued an uptrend given higher demand for non-metallic mineral products, particularly cement.
Sentiment was also said to have been boosted by the prospect of a new law — the Ease of Doing Business and
Efficient Government Service Delivery Law signed by President Rodrigo Duterte last month — that will streamline procedures, shorten processing time for government transactions, and create a central business portal to receive and obtain data involving business-related transactions, the NEDA claimed.
“A bullish business outlook is expected for the entire second quarter on the back of robust economic growth. An expansion of businesses will also be facilitated thanks to the new law on ease of doing business,” NEDA officer in charge Jose Miguel de la Rosa said.
“The full implementation of the Ease of Doing Business Act of 2018 and engagement in massive and coordinated capacity-building initiatives will help the manufacturing sector grow further,” he added.
ANZ Research economist Shashank Mendiratta, meanwhile, traced the robust growth in factory output to base effects.
“The numbers are solid but partly attributable to a favorable base,” Mendiratta said, noting that petroleum production continued to accelerate while capital goods also showed strong growth and was indicative of strength in the business cycle.
“Going forward, we do see some moderation in growth as price pressures turn adverse,” the economist added.
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