Decline in factory output slowed in July
MANILA, Philippines — Factory output continued to drop year-on-year even as the pace in July slowed compared to previous months as the economy gradually opened up under easing COVID-19 quarantine.
The Philippine Statistics Authority’s monthly integrated survey of selected industries report for July released Friday showed that the volume of production index (VoPI) fell 11.9 percent last July.
July’s VoPI—a proxy for factory output—nonetheless posted the smallest decline since the record 38.8-percent slide recorded in April—at the height of the most stringent COVID-19 lockdown in the region, which had put a halt to 75 percent of the domestic economy.
The value of production index also dropped by 14.8 percent in July, the slowest contraction since the 41.3-percent fall also last April.
In a statement, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the improving manufacturing figures since May “[suggested] a turnaround in economic activity.”
“While manufacturing is not yet in the positive territory, the trends of the volume and value of production in the last three months indicate an improvement in the trajectory of economic activity. This momentum suggests a gradual recovery of demand in the coming months until the end of the year,” said Chua, who heads the state planning agency National Economic and Development Authority (Neda).
“Sustaining the gradual and calibrated opening of the economy largely depends on the level of community quarantine that would allow businesses to operate and permit workers to remain mobile. To make this possible, safe and a sufficient availability of public transportation can be supported by service contract subsidies if needed,” Chua added.
But Neda “still sees the country’s manufacturing performance to remain subdued in the near-term as businesses expect the pandemic to have a lingering impact on production,” Chua said.
As such, Chua said the government would continue to enforce minimum health standards, which include wearing of face masks and face shields, and observing strict social distancing protocols so that manufacturers could continue operating amid the prolonged quarantine. —Ben O. de Vera
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