Factory output contraction eased to 2.8% in December

Year-on-year contraction in factory output further slowed in December last year to its narrowest since COVID-19 quarantine started, the government reported on Friday.

The Philippine Statistics Authority’s (PSA) latest monthly integrated survey of selected industries report for December showed that the volume of production index (VoPI) had shrunk by 2.8 percent year-on-year that month, the slowest since the monthly decline began in March last year.

VoPI—a proxy for factory output—posted growth in the first two months of 2020 before sliding amid prolonged quarantine restrictions—including a record fall of 37 percent in April when 75 percent of the economy stopped at the height of the longest and most stringent lockdown in the region.

The PSA attributed the smaller VoPI downturn mainly to the year-on-year growth posted by six industries: paper and paper products (up 26.8 percent), chemical products (up 7.5 percent), electrical machinery (up 5.7 year-on-year), food manufacturing (up 5.4 percent), as well as rubber and plastic products (up 4.9 percent).

The PSA added that eight manufacturing sectors recorded slower production volume drops in December.

For the entire 2020, VoPI shrank by an average of 10.3 percent, the PSA said.

The 5.1-percent decline in value of production index (VaPI) last December was also the narrowest since March 2020.

The PSA said six industry groups registered growth in production value, while seven managed to reduce their year-on-year contraction.

VaPI dropped by an average of 13.9 percent last year.