The manufacturing sector continued to grow in September 2016 due to sustained increase in capital goods production leaned on strong domestic demand and stable macroeconomic policies, according to the National Economic and Development Authority (NEDA).

“This is a sign that our domestic economy is robust and resilient, despite the slow global economic recovery,” said Socioeconomic Planning Secretary Ernesto M. Pernia.

In the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries for September 2016, the Volume of Production Index (VoPI) grew by 9.9 percent, pushing the three-month moving average to 11.6 percent. This is a leap from the 3.0 percent registered growth in September 2015.

“This signals the manufacturing sector’s recovery and expansion from its weak performance last year,” said Pernia.

Similarly, the Value of Production Index (VaPI) grew by 5.4 percent, a complete reversal from its 5.4 decrease in September 2015.

“We expect the sector to remain on its upward trajectory during the coming months, as firms anticipate the increase in demand during the approaching holiday season,” the Cabinet official said.

For capital goods, double-digit growth rates were posted by basic metals (41.0%), machinery except electrical (35.0%), and transport equipment (22.3%) in September 2016.

“This was backed by the increasing demand for construction-related materials, strong consumer confidence, and high importation of raw materials,” said Pernia.

Meanwhile, the average capacity utilization inched to 83.6 percent, with basic metals having the highest utilization rate at 88.5 percent followed by petroleum products at 88.4 percent.

“While this growth is a boon, it is important to note that the average capacity utilization of manufacturing firms barely moved since 2012. This may hamper the sector’s growth in long-run as it may end up struggling to keep up with the increasing domestic demand,” he said.

Thus, Pernia stressed that the country must foster a culture of innovation, research and development to boost productivity and remain competitive in an increasingly integrated global economy.

“We must ramp up our efforts in providing the economy’s infrastructure needs, particularly for the manufacturing and power sectors, to facilitate the smooth movement of goods and services and attract local and foreign investments,” he said.