Factory output continues slide in Aug
Credit to Author: ANNA LEAH E. GONZALES| Date: Fri, 04 Oct 2019 16:15:40 +0000
THE country’s manufacturing output, both in volume and value, dropped for the ninth consecutive month in August, the Philippine Statistics Authority (PSA) said on Friday.
Results of the statistics agency’s Monthly Integrated Survey of Selected Industries showed that the volume of production index (VoPi) declined by 9.3 percent in August, compared with the 6.1-percent contraction in July and 3.1-percent expansion the year before.
The decrease was attributed to the annual decreases in seven industry groups, led by petroleum products (-59.0 percent), furniture and fixtures (-43.4 percent), and transport equipment (-19.0 percent).
Miscellaneous manufactures (-17.7 percent), electrical machinery (-11.1), beverages (-8.4 percent) and textiles (-3.6 percent) round up the groups with losses.
The value of production index (VaPi) on the other hand, contracted by 7.9 percent in the month, worse than July’s 5.5 percent and reversing the 4.1-percent expansion in August 2018.
The latest contraction was blamed on the decline in the indices of nine major industry groups, also led by petroleum products (-61.8 percent). The others are transport equipment (-18.5 percent), electrical machinery (-14.3 percent), miscellaneous manufactures (-14.0 percent), textiles (-6.8 percent) furniture and fixtures (-6.6 percent), beverages (-5.3 percent), footwear and wearing
apparel (-1.4 percent), and paper and paper products (-0.3 percent).
But production indices in construction-related manufactures grew, with notable increases in the volume and value of non-metallic mineral products (8.9 percent for VoPI and 12.7 percent for VaPI) and basic metals (16.5 percent for VoPI and 6.8 percent for VaPI).
In a statement, the National Economic and Development Authority (NEDA) credited this particular growth to the construction of new cement plants and the expansion in the government’s infrastructure spending.
According to Socioeconomic Planning Secretary Ernesto Pernia, fast-tracking the implementation of infrastructure projects would help the manufacturing sector recover, despite the pessimistic business outlook brought about by lingering uncertainty in the global market.
“The completion of infrastructure projects will improve transport and logistics, [which are] crucial in supporting the manufacturing sector. An extension in the validity of the 2019 budget, particularly for infrastructure projects, and the immediate passage of the proposed national budget for fiscal year 2020 will assure [the] sustained implementation of construction-related projects and activities,” the NEDA chief said.
Such projects, he added, are expected to contribute to the increase in employment and disposable incomes, which will result in increased demand for consumer goods.
“Domestic demand is seen to be more favorable in the third quarter of 2019, with [the] production of consumer goods, such as food and beverages, tobacco, footwear and wearing apparel, and furniture and fixtures…expected to increase,” the official said.
Pernia also said increasing efforts to promote technology and innovation through the adoption of digital solutions across sectors and the amendment to the Foreign Investment Act of 1991 would prop up the manufacturing sector in the long run.