Manufacturing declines for 8th straight month in August

MANILA, Philippines — Domestic manufacturing performance weakened in August largely due to the lower output of products in the heavily weighted indexes, the Philippine Statistics Authority (PSA) reported yesterday.

Factory output, as measured by the Volume of Production Index (VoPI), contracted by 9.3 percent in August, reversing the 3.1 percent growth a year ago.

The Value of Production Index (VaPI), meanwhile, declined by 7.9 percent, likewise a reversal of the 4.1 percent growth in the same month last year.

This marks the eighth consecutive month of declines in the manufacturing indexes for this year.

The contraction was attributed to lower output of petroleum products, furniture and fixtures, transport equipment, electrical machinery, beverages and miscellaneous manufactures.

In August, manufacturing facilities operated at 84.3 percent capacity on average, with the highest capacity utilization rate seen for petroleum at 89.2 percent and the lowest for textiles at 80.2 percent.

Socioeconomic Planning Secretary Ernesto Pernia said fasttracking the implementation of infrastructure projects would help sustain the demand for construction-related manufactures.

He said this would help the domestic manufacturing sector recover amid a less optimistic business outlook for exports.

“The completion of infrastructure projects will improve transport and logistics, crucial in supporting the manufacturing sector. An extension in the validity of the 2019 budget, particularly for infrastructure projects, and the immediate passage of the proposed national budget for fiscal year 2020 will assure sustained implementation of construction-related projects and activities,” Pernia said.

He noted that infrastructure projects are seen to contribute to the increase in employment and disposable incomes, resulting in increased demand for consumer goods.

“Domestic demand is seen to be more favorable in the third quarter of 2019, with production of consumer goods such as food and beverages, tobacco, footwear and wearing apparel, and furniture and fixtures expected to increase,” he said.