Manufacturing sector rebounded with 21.9% expansion in January
The manufacturing sector recovered with a 21.9-percent growth in January to end a five-month slump, the National Economic and Development Authority said Tuesday.
Results of the Monthly Integrated Survey of Selected Industries conducted by the Philippine Statistics Authority showed that the volume of production index grew 21.9 percent in January, following a 9.2-percent decline in December. It was also higher than the 14.9-percent increase registered in January 2017.
The value of production index also jumped 20.4 percent in January from a year ago. The expansion led the three-month moving average growth rate of both indexes back to positive territory at 1.1 and 0.4 percent, respectively.
“Manufacturing output is expected to sustain growth in 2018 on the back of robust consumer demand, higher government consumption and continued gains in investments. The sustained momentum in global trade growth will also provide additional boost to manufacturing growth, particularly export-oriented sectors,” Economic Planning Secretary Ernesto Pernia said in a statement.
He said the growth of manufacturing was due to expansion in petroleum products, construction-related products, some export-oriented products and food manufacturing. These offset the declines in wood products, tobacco, transport equipment and rubber and plastic products.
Pernia also said the industry firms’ outlook for the first quarter of 2018 remained optimistic as improvement in production capacity, new product lines and enhanced marketing strategies were anticipated to increase both production and sales.
He said higher consumer demand, particularly on manufactured goods, was expected to continue with the increase in households’ disposable income due to the Tax Reform for Acceleration and Inclusion law’s implementation since January 2018.
Companies, however, remained cautious on some risks to growth such as the exchange rate, higher global commodity prices and weather-related 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 said.
“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 said improving connectivity among production sites processing areas and markets, and continuing to pursue bureaucratic and regulatory reforms to reduce the cost of doing business across all levels of government should be pursued.