Factory output fell by more than 73% in March

The country’s total manufacturing output slid by 73.4 percent year-on-year in March, the fastest drop in seven months, mainly due to the temporary closure of the only remaining oil refinery in the Philippines.

The Philippine Statistics Authority’s (PSA) monthly integrated survey of selected industries for March, which was released on Friday, showed the volume of production index (VoPI)—proxy for factory output—posted the steepest decline since the 82.2 percent in August 2020.

National Statistician Dennis Mapa said the main contributor to March’s VoPI contraction was the 97.4-percent fall in the production of petroleum coke and refined oil products.

Weak margins

Petron Corp.’s crude oil refinery in Bataan temporarily stopped operations in February due to weak margins. Earlier reports showed Petron intended to restart the refinery in the second half of the year.

Asked if the Philippines still needed domestic oil refiners, Socioeconomic Planning Secretary Karl Kendrick Chua said: “If we are competitive to give the people value for money.”

Finance Secretary Carlos Dominguez III earlier said the oil refiners’ woes were being felt worldwide as they were not competitive against integrated end-to-end refineries.

Value also down by 74%

Out of 22 industries, only five sectors posted drop in production volume, but they pulled the overall VoPI down, PSA data showed.

The PSA said fabricated metal products, except machinery and equipment, recorded the biggest VoPI growth in March, at 85.5 percent.

The value of coke and refined petroleum production dropped by 97.3 percent in March.

The total value of production index fell faster by 74.2 percent, also the steepest since August last year’s 83.1 percent.

Ahead of the more stringent quarantine restrictions imposed in National Capital Region Plus—Metro Manila andthe provinces of Bulacan, Cavite, Laguna and Rizal—which hosted many industrial and export zones, the factories’ average capacity utilization rate inched up to 61 percent in March from February’s 60.4 percent, with 18.8 percent of establishments operating at full (90 to 100 percent) capacity, the PSA said. —BEN O. DE VERA