Factories churn out lower output in April

MANILA, Philippines — Domestic manufacturing weakened both in terms of volume and value in April as previously strong sectors performed poorly during the month, the Philippine Statistics Authority reported yesterday.

Factory output, as measured by the Volume of Production Index (VoPI), declined 14 percent in April, reversing the positive growth of 21 percent in the same month last year.

Lower output were seen in 11 major industry groups of which the following registered double-digit declines: tobacco products, leather products, petroleum products, food manufacturing, furniture and fixtures, basic metals and transport equipment.

Similarly, the Value of Production Index (VaPI) declined 10.8 percent in April, a reversal of the 21.8 percent growth in April last year.

In April, a fifth of manufacturing facilities nationwide operated at below 70 percent capacity.

The National Economic and Development Authority (NEDA) expects manufacturing output to recover in the coming months alongside the improvement in domestic demand.

“Easing inflationary pressures, accelerated government spending on infrastructure, and a more upbeat consumer outlook also provide additional support given expectations of additional income and availability of more jobs,” said Socioeconomic Planning Secretary Ernesto Pernia.

He noted that there is a need to address the needs of the food processing sector as it accounts for the largest output in the manufacturing sector.

Weakness in this sub-sector is traceable to the prevailing weakness in the agriculture sector, a feeder sub-sector.

“The government may need to revisit existing interventions to ensure that they are designed to be responsive to the needs and actual behavior of farmers, fisherfolk and processors,” he said.

At the regulatory level, Pernia called for the clarification of regulations imposed by the food safety authorities.

“It must be ensured that all food products, both for domestic market consumption and for export, are aligned with Good Agricultural Practices or Good Manufacturing Practices,” he said.

He likewise reiterated his earlier call for the simplification of business transactions with the government which entails the standardization of requirements for business registrations and permit issuances.

“A strong whole-of-government – nay, whole-of-society – approach is needed to accelerate the growth of manufacturing and boost its contribution to industry growth,” said Pernia.