Manufacturing output surges 24.8% in February

MANILA, Philippines — The country’s manufacturing output posted double-digit growth in February, driven by significant increases in 11 major sectors, led by printing and food manufacturing, the Philippine Statistics Authority (PSA) reported yesterday.

Based on the The PSA’s Monthly Integrated Survey of Selected Industries (MISSI), the Volume of Production Index (VoPI) for manufacturing climbed to 24.8 percent in February from 9.8 percent in the same month last year.

The significant growth was attributed to increments in 16 major sectors, 11 of which posted double-digit increases.

Printing was the largest gainer among the sectors, posting a 108.1 percent rise. This was followed by food manufacturing at 32.6 percent, electrical machinery (30.3 percent), beverages (24.1 percent), petroleum products (23.4 percent), miscellaneous manufactures (20.5 percent), leather products (14.4 percent), fabricated metal products (12.6 percent), chemical products (11.1 percent), basic metals (10.7 percent) and machinery, except electrical (10.4 percent).

The National Economic and Development Authority (NEDA) attributed the rise in manufacturing output to the continued government reforms for the economy.

“The increasing working-age population, rising productivity, improvement in business environment, and aggressive infrastructure development will also help spur growth in the sector,” said NEDA officer-in-charge (OIC) and undersecretary for policy and planning Rosemarie Edillon said.

The Value of Production Index (VaPI), likewise, registered double-digit growth at 23.6 percent in the same month. This is higher than the 8.3 percent growth posted in the same period last year.

Similarly, the printing sector contributed the most to the growth, with a 103.9 percent increase in February.

Nine other sectors also posted double digit growth particularly, electrical machinery 33.2 percent, food manufacturing (30.2 percent), petroleum products (28.2 percent), beverages (26.3 percent), miscellaneous manufactures (21 percent), basic metals (17 percent), paper and paper products (13.7 percent), non-metallic mineral products (13.6 percent) and machinery, except electrical (10.5 percent).

The NEDA reported that the three-month moving average growth rate of the VoPI and the VaPI remain in positive territory at 12.9 and 11.7 percent.

“The industries’ outlook for both the current and succeeding quarters remains bullish with the expectation of sustained robust demand, improvement in production capacity, new product lines, and enhanced marketing strategies,” Edillon said.

She added this positive business sentiment of Philippine industries mirrored the high business confidence among Asian companies for the first quarter of 2018.

“However, risks to growth remain. The government must remain cautious of increasing inflation which may lead to higher cost of production for manufacturing firms. Strategies are needed to be pursued to sustain the upward growth trajectory of the manufacturing sector,” Edillon emphasized.

The NEDA official stressed the government needs to encourage all forms of innovation in manufacturing and manufacturing-related services, and to enhance the capacity of domestic firms, especially micro, small and medium enterprises in order to sustain the growth of the manufacturing sector.

“We need these initiatives to produce raw materials and intermediate goods that meet the requirements of international markets. We also need to pursue bureaucratic and regulatory reforms that incentivize compliance across all levels of government to eliminate red tape and reduce the cost of doing business,” Edillon said.