Manufacturing output grew by 20.4% in May
The country’s manufacturing sector posted an impressive performance in May, with the volume of production index (VoPI) reaching the highest level in seven months on the back of a robustly growing domestic demand.
Strong domestic demand for goods more than made up for the slack in exports during the month, prompting manufacturers to beef up production.
The National Statistics Office reported Wednesday that the volume of manufacturing output, measured in terms of VoPI, grew year-on-year by 20.4 percent in May. This was the fastest growth rate registered since September 2010. In April, the VoPI grew by 8.7 percent.
Recording a similar trend, the value of production index (VaPI), which measures output in terms of value, grew year-on-year by 9.7 percent in May, reversing the 1.6-percent decline recorded the previous month.
The encouraging development in the manufacturing sector bolstered hopes for the Philippine economy to rely less on consumption and more on investments for growth.
Economists say that boosting the industrial sector is an effective strategy to sustain the robust economic growth seen recently. The government is, thus, urged to implement projects and programs geared toward the development of the manufacturing sector.
An improving performance of the sector is widely believed to help generate jobs for people in the low-income segment and facilitate poverty-reduction efforts.
Arsenio Balisacan, director general of the National Economic and Development Authority, said he wanted to see the share of the manufacturing sector to the country’s gross domestic product to increase significantly.
He said that from 39 percent in the early 1980s, the manufacturing sector’s output fell to about 33 percent in 2012.
“The industry sector, particularly manufacturing, has a crucial role to play in helping us achieve rapid and inclusive growth. But we need to reverse its stagnation and decline,” Balisacan said in a speech during a forum organized by the National Academy of Science and Technology.
He noted that the case of Thailand was different and enviable, in that the share of the manufacturing sector to its economy grew from 30 percent in the 1980s to 44 percent last year.
Balisacan said the performance of the Philippine manufacturing sector so far in 2013 was encouraging, but this should be sustained over the long term to enable the economy to enjoy its poverty-reduction benefits.
In the first quarter, the industry sector grew by 10.9 percent, partly driven by the 9.7-percent expansion of manufacturing. This happened despite the drop in exports, indicating strong domestic demand.
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