THE Philippine government on Wednesday reported that the performance of the manufacturing sector remained strong, as output and sales expanded for the 10th straight month in October.
According to the Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries (Missi), the local manufacturing’s Volume of Production Index (VoPI) in October rose by 3.9 percent, while its Value of Production Index (VaPI) climbed by 3.3 percent.
While the rates of increase were slower than the September print, the figures were significant improvements from those seen in October last year.
In particular, the VaPI grew 4.5 percent in September this year, faster than October’s 3.3 percent. Compared to the 2017 print, however, the latest figures were a turnaround from the 6-percent contraction recorded last year.
The same trend was seen in the VoPI, where it grew faster at 4.2 percent in the previous month. Last year’s VoPI fell by 6.6 percent.
Both the VoPI and the VaPI were in positive territory for 10 consecutive months.
Missi is a monthly 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.
The rise in the manufacturing sector’s volume and value of production mirrors the country’s recent purchasing managers index (PMI) performance, where the sector grew the second fastest in the region for November.
In October the Philippines had the fastest-growing manufacturing sector among Southeast Asian nations in terms of its PMI performance.
The government attributed the positive performance during the month to increases in the production of petroleum, export-oriented products and non-metallic mineral products, which drove the expansion of manufacturing output in October.
For the rest of the fourth quarter of 2018, the government expects the sector to sustain its expansion, as strong consumer demand and an optimistic business outlook would provide a boost to the sector during the holidays.
The National Economic and Development Authority (Neda) said in a statement on Wednesday that it expects the manufacture of construction-related products—such as iron and steel and cement—to be driven by government’s spending on infrastructure.
The sustained growth in private construction activities is also seen to keep manufacturing numbers up.
“Over the near to medium-term, we see that the ‘Build, Build, Build’ program and the recently signed Regular Foreign Investment Negative List [RFINL] will help in raising the productivity of the manufacturing sector,” Socioeconomic Planning Secretary Ernesto M. Pernia said. This positive outlook for the fourth quarter echoes IHS Markit Economist David Owen’s earlier statement that the manufacturing sector’s performance is a strong indicator for growth in the remaining months of the year.
“Output growth remains sharp in Philippines’s manufacturing sector during November, building confidence for stronger GDP growth in the fourth quarter. The headline Nikkei PMI strengthened even further from October, while production levels rose at the fastest rate in almost two years,” Owen said.
Image credits: Nonoy Lacza