Factory production quickens pace in Nov

MANILA, Philippines – Manufacturing output grew at a faster 14.6 percent pace in November, boosted by increased production of petroleum products, transport equipment and food products, the Philippine Statistics Authority (PSA) reported yesterday.

Factory output, as measured by the Volume of Production Index (VoPI), previously rose 8.4 percent in October 2016 and 4.4. percent in November 2015. Increased production was also seen from beverages, rubber and plastic products, tobacco products and textiles.

The Value of Production Index (VaPI) for manufacturing also registered a steep increase of 10.6 percent in November from 4.3 percent in October and a 2.2 percent contraction in November 2015.

Socioeconomic Planning Secretary Ernesto Pernia said the manufacturing sector likely registered stronger growth in December due to increased consumer demand during the Christmas season.

“Looking ahead, we see the sector benefitting from strong private and public investments,” he said. “Low inflation, low unemployment, and strong remittances will also continue to drive domestic demand, and will boost manufacturing in the Philippines.”

Favorable farming conditions in November enabled the food subsector to register double-digit growth rates in both production (24.6 percent,) and sales (26.7 percent) from a 10 percent decline in both volume and value last year, said the National Economic and Development Authority (NEDA).

For intermediate goods, production value of petroleum products has been growing steadily for three consecutive months, following consistent declines since 2015. The petroleum subsector posted growth rates of 80.3 percent and 68.8 percent in volume and value of production during the reference period, respectively.

For capital goods, the transport equipment subsector posted a 40.4 percent growth in production volume and 39.1 percent growth in production value, supported by local demand for vehicles such as passenger cars, light trucks and buses.

In November, factories operated at an average capacity utilization rate of 83.8 percent, with production facilities for petroleum products operating at the highest utilization rate of 88.6 percent.

Fifty-five percent or 11 of the 20 major industries operated at 80 percent and above capacity utilization rates. These were: petroleum products, basic metals, non-metallic mineral products, machinery except electrical, food manufacturing, chemical products, electrical machinery, paper and paper products, rubber and plastic products, wood and wood products and printing.

Pernia said the government must continue to pursue efforts that will boost the country’s growing manufacturing sector and provide quality jobs.

“One is through encouraging innovation in manufacturing so that we remain competitive with the rest of the world. Second, we need to minimize bureaucratic procedures and regulatory barriers to attract investments and to reduce the cost of doing business and expand production capacity,” he said.

“Lastly, we must make sure that the technical skills of our labor force are in line with industry needs, and that opportunities to enhance technical competencies are available to people in the low-income and far-flung areas of our country,” Pernia added.