Factory output up in September

MANILA, Philippines - The country’s manufacturing sector stepped up its production volume in September as it grew 3.5 percent from 1.9 percent in August.

The Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries for September 2015 showed the manufacturing sector’s Volume of Production Index (VoPI) increased 3.5 percent but lower than the 4.7 percent growth it posted in the same month in 2014.

The National Economic and Development Authority (NEDA) said the robust growth was due to demand for tobacco, transport equipment and construction activity.

Economic Planning Secretary and NEDA director general Arsenio M. Balisacan said the manufacturing sector is forecast to surge further with the holiday season and the approaching May 2016 elections.

“This makes business leaders anticipate increased orders and sales, which will boost both the production and sales of manufactured goods,” Balisacan said.

He said the improved pace of government spending, low production costs, declining oil prices and the steady inflow of remittances from overseas Filipino workers favor stronger growth momentum of the manufacturing sector going into 2016.

On the other hand, the same PSA report showed the Value of Production Index (VaPI) in September declined 4.8 percent but slower compared with the 6.1-percent drop in August 2015.

For consumer goods, tobacco and beverages both turned in double-digit growth rates, with the former posting a 29.2-percent growth in volume and 30.4-percent growth in value of net sales.

Beverages grew 21.4 percent in volume and 32.2 percent in value.

On the other hand, the food subsector continued to suffer both in value and volume of net sales due to the persisting dry spell brought about by the El Niño.

To counter negative impact of external forces, including natural disasters, Balisacan said government must strengthen the linkages of all production sectors through the implementation of the Comprehensive National Industrial Strategy.

The strategy was designed to guide the effective integration of the agriculture, industry and services sectors to ensure sustained growth and resiliency of the economy to external and internal shocks.

“The government needs to enhance the productive capacity of micro, small, and medium enterprises (MSMEs) through capacity building and improved access to financing. It should also play an active role in facilitating the smooth flow of goods by addressing logistical bottle necks and reducing transportation costs,” he said.