The manufacturing sector continues to grow in February 2016 due to increased production of furniture, food products, and rubber, according to the National Economic and Development Authority (NEDA).
In the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries for February 2016, the Volume of Production Index (VoPI) grew by 8.4 percent, a turnaround from the 2.1 percent decline recorded in February 2015.
Similarly, the Value of Production Index (VaPI) recorded a modest growth of 2.8 percent, rebounding from the 7.6 decline recorded in the same period last year.
“The manufacturing sector is expected to sustain growth this year because of our strong macroeconomic fundamentals, resilient domestic consumption, and upcoming national elections. There is a positive business outlook due to anticipated increases in gross revenues and net income of some of the country’s largest corporations,” said Socioeconomic Planning Secretary Emmanuel F. Esguerra.
He adds that this scenario increases the availability of jobs while stable prices of commodities, government assistance such as the Pantawid Pamilyang Pilipino Program (4Ps), and election-related spending will also provide additional boost to domestic consumption.
For consumer goods, furniture and fixtures recorded strong growth on the back of robust domestic demand, posting an increase in volume of 32.4 percent and value of 13.2 percent in February 2016.
Likewise, the food subsector sustained double-digit growth in February, posting a 26-percent and 25.8-percent growth rate in volume and value of production, respectively.
“Driven by strong consumer spending and efficient distribution of goods, the growth in food production is expected to continue in the coming months as El Niño is anticipated to weaken and fade away during the second quarter of 2016,” said Esguerra, who is also NEDA Director-General.
For intermediate goods, rubber and plastic products posted a double-digit growth of 25.6 in volume and 1.5 percent growth in value of production. For capital goods, electric machinery grew by 16.3 and 8.3 percent in volume and value, respectively.
Esguerra also said that with low global oil prices, lower production costs will encourage expansion of manufacturing production.
“Thus, to maximize low oil prices, the government must ensure that stable macroeconomic fundamentals are sustained and measures to further reduce cost of doing business are continually pursued. Also, access to high-quality raw materials and reliable energy, logistics and other manufacturing-related services must be available to support robust growth of manufacturing output,” he said.
Esguerra also added that strategic investments in research and development must be pursued. The development of new products and services and the improvement of existing ones will enhance the competitiveness of local players in the global market.