Manufacturing slump continues

A government-wide approach is necessary to boost manufacturing growth amid the sector’s sluggish performance, with the government’s latest manufacturing survey showing both the volume and value of production in the country falling for the fourth consecutive month.

In a statement, the National Economic and Development Authority said the Monthly Integrated Survey of Selected Industries for the month of April showed that the Volume of Production Index (VoPI) fell by 14 percent while the Value of Production Index (VaPI) was down by 10.8 percent, reinforcing the trend that began in January 2019.

Despite this, “manufacturing output is expected to recover, supported by improved domestic demand in the coming months,” Economic Planning Secretary Ernesto Pernia said. “Easing inflationary pressures, accelerated government spending on infrastructure and a more upbeat consumer outlook also provide additional support given expectations of additional income and availability of more jobs.”

A strong whole-of-government approach is needed to accelerate the growth of manufacturing and boost its contribution to industry growth, he added. “The needs of the food processing sector should be addressed as it accounts for the largest share among all manufacturing subsectors. This points to the critical importance of agriculture, which, besides being the source of food, is also the feeder sector to the food manufacturing subsector.”

Pernia said there was a need to address the governance issues faced by the agribusiness sector and its related industries. President Duterte was earlier reported as already looking for a replacement for the current head of the Department of Agriculture.

“The government may need to revisit existing interventions to ensure that they are designed to be responsive to the needs and actual behavior of farmers, fisher folks and processors,” he said.

The delineation of responsibilities across various food safety regulatory authorities should be clarified in order to improve the enforcement of regulations.

“It must be ensured that all food products, both for domestic market consumption and for export, are aligned with good agricultural practices or good manufacturing practices,” Pernia said.

The economic planning chief also stressed the need to encourage businesses to increase production.

“Transacting with the government must be simplified and made less expensive, as mandated by the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, ” he said.

In addition, the law calls for the standardization of requirements for business registrations and permit issuances, and capacity building to improve the efficiency of local government units in the processing of business applications.