Factory output up 11.8% in July 2018

MANILA, Philippines — The country’s manufacturing output posted double-digit growth in July, driven by significant increases in a number of major industries led by fabricated metal products and petroleum products, the Philippine Statistics Authority (PSA) reported yesterday.

Based on the PSA’s Monthly Integrated Survey of Selected Industries (MISSI), the Volume of Production Index (VoPI) for manufacturing climbed by 11.8 percent in July compared to the 5.1 percent decline in the same period last year.

This was driven by the growth in seven out of 14 major sectors, led by fabricated metal products with a 39.7 percent rise.

Petroleum products also registered gains at 38.3 percent, textiles (33.5 percent), beverages (21.8 percent), miscellaneous manufactures (19.9 percent), basic metals (19.1 percent) and machinery except electrical (12.1 percent).

“The growth in petroleum products, textile, beverages and non-electrical machinery offset the declines in the production volume of tobacco, footwear and wearing apparel, wood products, and furniture and fixtures,” the National Economic and Development Authority (NEDA) said.

It added that high importation of raw materials and intermediate goods supported the increase in production levels of export-oriented goods.

“Production and sales of transport equipment recovered at the beginning of the second semester of 2018 after two consecutive months of contractions. The improvement is consistent with car manufacturers’ improved outlook on automotive sales,” NEDA said.

It added that growth in the production volume of construction-related manufactures slightly slowed down in July, with slight declines in cement production and miscellaneous non-metallic minerals. Volume of production of glass and basic metals, however, posted double-digit growth. Net sales of non-metallic mineral products and basic metals also rose.

Similarly, the Value of Production Index (VaPI) grew by 12.2 percent from the six percent decline a year ago.

This was driven by the significant improvement in the production performance of 15 sectors led by petroleum products which registered a 66.5 percent gain.

“The double-digit growth in the value of refined petroleum products continued to push the overall increase in the value of petroleum products in July,” the NEDA said.

Production of textiles also rose 39.1 percent, beverages (38.3 percent), basic metals (29.9 percent), miscellaneous manufactures (24.7 percent), machinery except electrical (19.1 percent), paper and paper products (15.4 percent) and electrical machinery (10.3 percent).

“Growth in the food subsector was due to strong household consumption and efficient market operations. Food manufacturing value was mainly driven by increases in the production value of animal feeds and sugar,” NEDA said.

Moreover, NEDA said the positive July performance is expected to sustain manufacturing growth throughout the third quarter of the year.

“We expect this strong performance of the manufacturing sector this year as we continue to see stable domestic demand, as well as robust investments due to heightened infrastructure projects and consumer spending,” said Socioeconomic Planning Secretary Ernesto Pernia.

“This upward growth trajectory is likely to be sustained. And the whole of government continues to push for measures improving efficiency and innovation in the production sector in order to sustain this robust performance in the second half of the year,” Pernia added.