THE implementation of the enhanced community quarantine (ECQ) would likely affect the overall production of the manufacturing output starting in March, according to the National Economic and Development Authority (Neda).
This despite the Volume of Production Index (VoPI) posting a growth of 3 percent in February 2020, faster than the 0.1-percent growth posted in January and the 9.3-percent contraction in February 2019.
In an e-mail to BusinessMirror, Assistant National Statistician Divina Gracia L. del Prado of the Philippine Statistics Authority (PSA) said this growth was the fastest since August 2018 when the VoPI posted a 3.1-percent growth.
“For March, we expect that the enhanced community quarantine has weighed heavily on the domestic demand on manufacturing products. Strategies to help the manufacturing establishments affected by the outbreak have to be put in place,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
“We also expect that the global supply chain disruptions brought by the pandemic will have a negative effect on the manufacturing and merchandise exports,” he added.
Neda listed those manufactured goods that will
likely increase in production in the coming months as: food, beverages,
chemical products and health-related
manufactures.
Meanwhile, identifying sources of supply of raw materials, and ensuring that the supply and distribution chain remain unhampered are key elements for sustained production and distribution of essential goods and services, Pernia also said.
“The economy should be able to quickly adapt to and thrive under the new normal. Utilizing digital platforms is crucial in optimizing production and distribution of goods and services. Business continuity plans must also be formulated, particularly for the most vulnerable micro, small and medium enterprises.” Pernia added.
The impact of Covid-19 on other countries is expected to be felt in the Philippines via tourism, aviation, trade, and overseas Filipino workers’ remittances.
To help sectors adjust to the “new normal,” the Inter-agency Task Force Technical Working Group for Anticipatory and Forward Planning, chaired by Neda, is discussing recommendations and possible interventions.
The group did surveys for business owners, consumers, and agriculture and fisheries sector. A public consultation on the new normal was opened. A report of the group will serve as blueprint for a whole-of-government-cum-private-sector effort for the country’s recovery and rehabilitation.
February results
THE country’s manufacturing output posted its highest growth in over a year, according to results of the Monthly Integrated Survey of Selected Industries (Missi) released by the PSA.
Missi data showed 10 major industry groups posted double-digit growth in February—led by printing, with growth of 38.4 percent and fabricated metal products, 30.3 percent.
PSA data also showed the VoPI growth of machinery except electrical group at 28 percent, followed by chemical products with 23.8 percent; beverages, 16.9 percent; and wood and wood products, 11.3 percent.
Meanwhile, PSA data showed the Value of Production Index (VaPI) continued to decline, with a contraction of 1.8 percent in February.
The VaPI contracted by 5.2 percent in January and 6.2 percent in February last year.
The PSA traced the VaPI contraction largely due to 20 major industry groups that saw double-digit contractions, led by petroleum products, the VaPI of which contracted 35.9 percent.
Data showed VaPI contracted for tobacco products at 26.1 percent; leather products, 26.1 percent; miscellaneous manufactures, 24.4 percent; basic metals, 14.9 percent; transport equipment, 12.1 percent; and paper and paper products, 10.6 percent.
Meanwhile, Missi data showed the average capacity utilization rate was at 84.6 percent. This was largely because 12 of the 20 major industries had at least 80-percent capacity utilization rates during the month.
“More than a quarter of total manufacturing establishments operate at full capacity,” PSA said.
Data showed factories that operated at full capacity or 90 percent to 100 percent in February accounted for 27.9 percent of total manufacturing firms. PSA also said more than half or 54.4 percent operated at 70 percent to 89 percent capacity, while almost one-fifth or 17.7 percent operated below 70 percent capacity.
Image credits: Roy Domingo