Manufacturing recovers, trade jumps by a tenth in August
Manufacturing in August recovered from the previous month’s decline while external trade jumped by a tenth, the government reported Tuesday.
The Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries for August showed that the Volume of Production Index (VoPI), a proxy for manufacturing output, grew 2.8 percent that month, a reversal of the 3.5-percent drop in July.
The growth in VoPI in August, however, was slower than the 13.3-percent jump in manufacturing during the same month last year.
In a statement, Undersecretary and officer-in-charge Rolando G. Tungpalan of the state planning agency National Economic and Development Authority expressed optimism that manufacturing expansion will even “improve” during the fourth quarter on expectations of robust construction under the ambitious “Build, Build, Build” infrastructure program.
“Sustained infrastructure development, translating to increase in public construction expenditure, is anticipated not only to increase the growth of the manufacturing sector but also to support the continuous growth of the economy,” Tungpalan said, citing that “construction-related manufactures led the recovery in manufacturing output as the production of basic metals, fabricated metal products, and non-metallic mineral products continues to increase at 28.5 percent, 89.5 percent, and 18.7 percent, respectively.”
The Duterte administration early this year unveiled the “Build, Build, Build” plan aimed at ushering in “the golden age of infrastructure” after years of neglect.
Under “Build, Build, Build,” the government would rollout 75 flagship, “game-changing” infrastructure projects, with about half targeted to be finished within President Duterte’s term, alongside plans to spend a total of up to P9 trillion on hard and modern infrastructure until 2022.
But Tungpalan cautioned about the possible impact of weather disruptions as well as potential higher prices of inputs to domestic manufacturing moving forward.
“Short-term upward inflationary pressures such as increase in global oil prices, as well as price increases in fish, corn, vegetables, flour and other cereal products, may affect cost of production. Typhoon occurrences may also interrupt business activities, resulting in lower manufacturing output,” Tungpalan said.
As for trade, the PSA reported also Tuesday that the Philippines’ combined merchandise exports and imports in August climbed 10 percent to $13.42 billion from $12.2 billion a year ago.
Neda noted that the total grade growth in August was faster than June’s 1.5 percent and July’s 2.5 percent.
In August, shipments of Philippine-made goods to overseas grew 9.3 percent year-on-year to $5.51 billion, while the value of imported products rose by a faster 10.5 percent to $7.92 billion.
The increase in exports that month reversed the 1.8-percent drop in August last year, but the imports’ growth was slower than a year ago’s 16 percent.
As such, exports sustained growth for the ninth straight month in August, while imports reversed two consecutive months of decline.
Since the value of imports exceeded that of exports, the balance of trade in goods remained at a deficit of $2.41 billion, wider than the $2.13 billion recorded in August last year. /je
