Factory output extends decline in December

MANILA, Philippines — Factory output continued to decline in December 2019 mostly because of steep declines in the production of petroleum, basic metals, as well as furniture and fixtures, the Philippine Statistics Authority (PSA) reported yesterday.

Manufacturing output as measured by the Volume of Production Index (VoPI) declined by 10.1 percent in December 2019, faster than the decline of 9.3 percent in December 2018.

Contributing largely to the decline in production were the negative 48.8 percent and negative 50.6 percent growth rates for petroleum products and basic metals respectively.

Steep declines of 30.4 percent were seen for furniture and fixtures and 10.5 percent for miscellaneous manufactures.

The Value of Production Index (VoPI) likewise declined faster at 9.5 percent in December 2019 from the decline of 9.1 percent in December 2018.

In December 2019 only a quarter of manufacturing firms operated at full capacity.

The average capacity utilization rate for total manufacturing in December 2019 was 84.4 percent with the highest utilization rate seen for petroleum products at 90 percent.

Twelve of the 20 major industries operated at at least 80 percent capacity.

The National Economic and Development Authority said the government should continue supporting initiatives towards digital solutions in the private sector to boost manufacturing growth and bounce back from its decline in 2019.

“We encourage industries to capitalize on innovation to reach their growth potential in this era of the Fourth Industrial Revolution. To this end, the government needs to formulate and implement policies and programs to stimulate innovation in the country,” said Socioeconomic Planning Secretary Ernesto Pernia.

Building the capacity of the workforce and embedding innovation in training are also crucial to meet technical and emerging market demands.