Factories seen sustaining double-digit hike in output

The double-digit growth in manufacturing output will likely be sustained for the whole of 2018 due to robust consumer demand, according to the National Economic and Development Authority (Neda).

On Tuesday the Philippine Statistics Authority (PSA) said the manufacturing sector’s Volume of Production Index (VoPI) grew 21.9 percent in January, faster than the 14.9 percent recorded in the same period a year ago.

In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia attributed this to strong consumer demand, which will be supported by the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“Manufacturing output is expected to sustain growth in 2018 on the back of robust consumer demand, higher government consumption and continued gains in investments,” Pernia said.


“The sustained momentum in global trade growth will also provide additional boost to manufacturing growth, particularly export-oriented sectors,” he added.

Pernia also said industry firms’ outlook for the first quarter of 2018 remains optimistic because of improvements in production capacity, new product lines and enhanced marketing strategies.

These, the Neda said, will likely boost the manufacturing sector’s production and sales performance this quarter.

However, Pernia said, some firms remained cautious because of risks, such as the volatility in exchange rates, higher global commodity prices and weather disturbances.

“The perceived negative effects, however, will be offset by improved infrastructure that is partly being financed by TRAIN.  Moreover, the succeeding packages of the TRAIN are intended to make our tax regime internationally competitive,” Pernia added.

“To support the upward growth trajectory of manufacturing, the government must create and maintain an environment that is conducive to innovation and entrepreneurship, and enhance the production capacity of local suppliers of raw materials and intermediate goods, especially micro, small and medium enterprises,” he said.

Pernia added there is a need to improve connectivity among production site, processing areas and markets, and continuing to pursue bureaucratic and regulatory reforms to reduce the cost of doing business across all levels of government must also be pursued.

In the PSA’s Monthly Integrated Survey of Selected Industries (Missi), the Value of Production Index (VaPI), rose by 20.4 percent. The growth led the three-month moving average growth rate of VoPI and VaPi back to positive territory at 1.1 and 0.4 percent, respectively.

Missi is a report that monitors the production, net sales, inventories and capacity utilization of select manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.

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A professional journalist for over a decade, Cai U. Ordinario currently writes macroeconomic and urban development stories for BusinessMirror. She has received awards for excellence in reporting on the macroeconomy and statistics. She was also cited for her contribution to statics reporting by the National Statistical Coordination Board (now the Philippine Statistics Authority). She is a recipient of journalism fellowships including the Jefferson Fellowship from the Honolulu-based East West Center. She is currently completing her Masters degree in Communication at the University of the Philippines. She graduated with a degree of Bachelor of Arts Major in Journalism from the University of Santo Tomas.