PSA reports robust manufacturing growth in January
THE year started with robust manufacturing output growth as production in 13 major sectors jumped double digits in January, the government reported Tuesday.
The Philippine Statistics Authority’s latest Monthly Integrated Survey of Selected Industries for January showed that the Volume of Production Index (VoPI) climbed 21.9 percent that month.
January’s VoPI, which serves as a proxy for manufacturing output growth, was faster than the 14.9 percent rise a year ago.
“The growth was supported by the two-digit annual expansions in 13 major sectors, namely: printing (114.5 percent), leather products (39.2 percent), petroleum products (37 percent), machinery except electrical (36.8 percent), basic metals (35.5 percent), chemical products (32.3 percent), fabricated metal products (32.2 percent), beverages (31.8 percent), non-metallic mineral products (17.5 percent), food manufacturing (15.2 percent), paper and paper products (14.7 percent), electrical machinery (13.9 percent), and miscellaneous manufactures (12.3 percent),” the PSA said.
Value of production
The Value of Production Index (VaPI) also grew by a faster 20.4 percent in January from a year ago’s 13.7 percent.
“Manufacturing output is expected to sustain growth in 2018 on the back of robust consumer demand, higher government consumption, and continued gains in investments. The sustained momentum in global trade growth will also provide additional boost to manufacturing growth, particularly export-oriented sectors,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
“The growth of manufacturing [in January] was due to expansions in petroleum products, construction-related products, some export-oriented products, and food manufacturing. These offset the declines in wood products, tobacco, transport equipment, and rubber and plastic products,” noted Pernia, who also heads the state planning agency National Economic and Development Authority.
“Higher consumer demand, particularly on manufactured goods, is also expected to continue with the increase in households’ disposable income due to the Tax Reform for Acceleration and Inclusion (TRAIN) Law,” Pernia said.
Risks
“However, firms remain cautious on some risks to growth such as the exchange rate, higher global commodity prices and weather-related disturbances,” Pernia added.
“The perceived negative effects, however, will be offset by improved infrastructure that is partly being financed by TRAIN. Moreover, the succeeding packages of the TRAIN are intended to make our tax regime internationally competitive,” the Neda chief said.
Moving forward, Pernia said that “the industry firms’ outlook for the first quarter of 2018 remains optimistic as improvement in production capacity, new product lines, and enhanced marketing strategies are anticipated to increase both production and sales.”
According to Pernia, “to support the upward growth trajectory of manufacturing, the government must create and maintain an environment that is conducive to innovation and entrepreneurship, and enhance the production capacity of local suppliers of raw materials and intermediate goods, especially micro, small and medium enterprises.”
“Improving connectivity among production site, processing areas and markets, and continuing to pursue bureaucratic and regulatory reforms to reduce the cost of doing business across all levels of government must also be pursued,” according to Pernia.
