By Cai U. Ordinario
The growth in the country’s manufacturing output significantly slowed to 2.4 percent in 2015, according to the Philippine Statistics Authority (PSA).
In the latest Monthly Integrated Survey of Selected Industries (Missi), PSA data showed the volume of production index (VoPI) in 2015 slowed from the 7.3-percent growth in 2014.
“We must continue to help the manufacturing sector realize its potential by creating and strengthening linkages across all production sectors. This will enhance its capacity to absorb labor,” Acting Economic Planning Secretary Emmanuel F. Esguerra said.
He added that the government must continue to improve infrastructure to support business activity and simplify business processes.
Esguerra pointed out that better infrastructure can also encourage businesses to reap the benefits of free-trade agreements.
“Smooth flow of goods can be achieved through adequate and resilient road networks, seaports and airports, and reliable telecommunication services. These improvements will enhance the capacity of local players to participate in global value chains,” Esguerra said.
In December 2015 the VoPI posted a growth of 4.9 percent, higher than the 4.7 percent registered in December 2014 and 4.4 percent posted in November 2015.
Esguerra said that in terms of consumer goods, beverages posted a 12-percent growth in volume of production and a 15.2-percent growth in value of production—tripling its performance from November 2015.
On the other hand, the drop in the food subsector slowed down in both production volume and value, registering a contraction of 1.3 percent and 2.7 percent, respectively, due to the ill effects of El Niño in the second semester of 2015.
“It is important to broaden the scope of supply and marketing linkages to dampen the impact of El Niño, which is reported to last until the second quarter of 2016,” Esguerra said.
“This includes encouraging more processing and better storage, packaging and marketing of agricultural products to expand product range and reach a wider market,” he added.
Meanwhile, the average capacity utilization of firms maintained its growth at 83.5 percent last December, with basic metals posting the highest utilization rate of 88.5 percent.
The PSA said 55 percent, or 11 of the 20 major industries, operated at 80 percent and above capacity- utilization rates.
Apart from basic metals, high average capacity-utilization rates were observed in petroleum products, nonmetallic mineral products, machinery except electrical and food manufacturing, among others.
“Despite the unfavorable economic global climate, the sector remains optimistic in 2016. With low and stable inflation and good employment opportunities, consumers have increased spending power, which strengthens domestic demand,” Esguerra said.
“The continued drop in petroleum prices will also keep operating costs minimal, and this is expected to boost the volume of production,” he added.
The Missi provides timely flash indicators that monitor the performance of growth-oriented industries in the manufacturing sector.
The earliest version of the Missi is the Survey of Key Enterprises in Manufacturing, which was created in 1981 as a project of the National Economic and Development Authority (Neda).