PH factory output dips for 7th straight month
Credit to Author: ANNA LEAH E. GONZALES| Date: Tue, 06 Aug 2019 17:12:29 +0000
THE country’s manufacturing output, both in volume and value, declined for the seventh consecutive month, the Philippine Statistics Authority (PSA) reported on Tuesday.
Results of the latest Monthly Integrated Survey of Selected Industries showed that the volume of production index (VoPI) contracted by 10.5 percent in June from last year’s 9.8-percent expansion. It was also worse than May’s 9.9-percent decline.
PSA blamed the contraction on annual decreases in 11 major industry groups, led by petroleum products (-69.3 percent), furniture and fixtures (-40.5), and basic metals (-18.3).
Other groups that recorded declines were electrical machinery, machinery except electrical, food manufacturing, non-metallic mineral products, tobacco products, textiles, miscellaneous manufactures, and leather products.
The value of production index (VaPI), meanwhile, dropped by 9.6 percent, reversing the 10.9-percent expansion in June last year and worse than the 9.1-percent contraction in May.
“The decline of VaPi in June 2019 can be attributed to the decreases in the indices or three major industry groups led by petroleum products (-69.9 percent), basic metals (-23.0 percent), and leather products (-20.0 percent).
The National Economic and Development Authority (NEDA) said efforts to improve the business environment should be increased up to improve the country’s manufacturing sector.
“We need to instill a sense of urgency in government to implement economic reforms,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
“Manufacturing output [is likely to] remain muted in the near term as business and consumer outlook for the third quarter of 2019 turned less upbeat,” he added.|
Production, the NEDA chief said, could be stifled as the seasonal slack in domestic demand and business activities during the rainy season limits overall manufacturing growth.
“Moving forward, domestic demand expansion is needed to support the growth of manufacturing, especially given the slowdown in global demand” he added.
“The now-markedly slower inflation rate, which is back to [within the] government’s target range, bodes well for producers of manufactured goods,” he added, referring to the 2.4-percent consumer prime growth rate recorded for July, which falls within the Bangko Sentral ng Pilipinas’ 2.0- to 2.8-percent range.
According to Pernia, the significant reduction in the intensity of the El Niño weather phenomenon will also soften the risk to the supply of raw materials for the food manufacturing subsector.
As of end-July, only nine provinces are expected to experience drought, compared to 32 provinces as of end-June.
“The government has been working to strengthen the transport and logistics sector as it is crucial to prop up manufacturing growth,” Pernia said.
A joint administrative order among various relevant agencies has been proposed, which aims to reduce shipping costs and port congestion.
“The passage of the amendment to the Public Service Act is expected to encourage competition in the air, maritime and road transport, as well as logistics services, and enhance the productivity and efficiency of service delivery,” Pernia said.
The recent issuance of the implementing rules and regulations of the Ease of Doing Business and Efficient Government Service Delivery Act is also expected to address bureaucratic concerns.