Factory output rises to 5-month high in February

MANILA, Philippines — Manufacturing output in February picked up at its fastest pace in five months, driven by the performance of electronic, food and chemical products, according to the Philippine Statistics  Authority (PSA).

Preliminary results of the PSA’s Monthly Integrated Survey of Selected Industries showed the Volume of Production Index (VoPI) for manufacturing posted an 8.9-percent growth in February, faster than the 6.2-percent expansion in January.

This was the fastest growth since the 9.5-percent increase in September 2023 and higher than the 2.6-percent growth in February last year.

 “The expansion in the annual growth of the VoPI for manufacturing in February 2024 was mainly brought about by the double-digit annual increase in the manufacture of computer, electronic and optical products at 13.4 percent in February 2024 from an annual decline of 1.4 percent in the previous month,” the PSA said.

According to the PSA, the food products industry division also contributed  to the higher VoPI growth as it rose to 9.2 percent in February from 5.2 percent in January.

Driving the faster growth in manufacture of food products in February was the increase in vegetable and animal oils and fats at 23 percent during the month from 8.2 percent in January.

Other contributors to the faster growth in VoPI for food products were the double-digit increases in prepared animal feeds at 16.4 percent in February this year from 2.3 percent in the previous month and in the processing and preserving of meat at 27.7 percent during the month from the 12.7 percent uptick in January.

Another main contributor to the higher overall VoPI growth was the chemical and chemical products industry division, which increased at a faster rate of 25.9 percent in February from the previous month’s 8.1 percent.

For the January to February period, average VoPI growth was at 7.5 percent.

“The latest pick-up/improvement could reflect the continued recovery in the local economy, as partly manifested by near record-high overseas Filipino worker remittances, record-high business process outsourcing revenues, sharp improvement in foreign and local tourism (and)employment data still among the best levels in nearly 20 years or since 2005,” Rizal Commercial Banking Corp. chief economist  Michael Ricafort said.

According to Ricafort, the VoPI may have also posted faster growth in February due to increased business activities again, taking into account the Lunar New Year activities in February  after the seasonal rise in demand or sales during the Christmas season and the  preparations for the Holy Week holidays.

In addition, he said the pick up in manufacturing production in February is consistent with the year-on-year growth in both exports and imports during the month.

Based on responding establishments, the PSA said the average capacity utilization rate for manufacturing in February was at 75 percent from the previous month’s 75.2 percent.

“All industry divisions reported capacity utilization rates of more than 60 percent during the month,” the PSA said.

In terms of reported capacity utilization rate, the top three industry divisions were machinery and equipment except electrical (84.6 percent), rubber and plastic products (80 percent) and transport equipment (80 percent).

Of the total responding establishments, 28.3 percent operated at full capacity or 90 to 100 percent, while 39.2 percent operated at 70 to 89 percent and 32.5 percent operated below 70 percent capacity.