August 5, 2020
The Philippine manufacturing sector exhibited slight improvements in its performance in June 2020, suggesting signs of recovery, the National Economic and Development Authority said.
As economic activities remain limited, the manufacturing sector contracted in both volume and value of production terms but at a slower rate than the previous month. In its Monthly Integrated Survey of Selected Industries (MISSI), the Philippine Statistics Authority reported today that the year-on-year Volume of Production Index (VoPI) declined by 19.3 percent while the Value of Production Index (VaPI) fell by 22.5 percent.
Nonetheless, both of these indices performed better than the revised VoPI and VaPI of -28.5 percent and -31.2 percent recorded in May 2020.
Expansions in petroleum products, wood and wood products, and chemical products tempered the decline of total manufacturing production.
Moreover, the three-month moving average growth rate of VoPI (-28.9%) and VaP (-31.6%), is significantly lower compared to the previous month’s average of -24.9 percent and -28.1 percent, respectively.
“The declining trend has slowed down in June 2020, which reflected the gradual easing of quarantine restrictions,” said Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua.
The rate of decline for most of the construction-related manufactures was slower compared to the previous month. The easing of various community quarantine measures in many parts of the country permitted the continuation of several public and private construction projects (e.g. quarantine and isolation facilities, rehabilitation works, sewerage projects, water service facilities and digital infrastructure, among others). Construction activities were also allowed to resume subject to minimum public health standards and social distancing measures in the workplace.
However, the country’s manufacturing performance is still expected to be adversely affected by the ongoing global pandemic in the near term, the Cabinet official said.
Starting August 4, 2020, Metro Manila, Laguna, Cavite, Rizal, and Bulacan returned to a Modified Enhanced Community Quarantine (MECQ) for fifteen days.
“The return to MECQ in these areas is a difficult but important decision. Although this is expected to weigh down on the economy in the short term as resumption of business operations is limited, this will give our health system some respite amid the recent rise in COVID19 cases. It will also help improve productivity in the near-term as more lives are saved and consumer confidence restored,” Chua said.
He added that with the rising COVID-19 cases in the country, the strict enforcement of containment measures by both government and the private sectors need to go hand in hand with the efforts to gradually reopen the economy to ensure that jobs and income are protected.
“The administration will pursue the swift passage of the Bayanihan II bill. The bill allocates PhP50 billion to government financial institutions as capital infusion for the grant of low-interest loans and credit guarantees to micro, small and medium enterprises (MSMEs). It will also support strategically important and distressed firms. The bill also allocates Php90 billion to support the healthcare system and the hardest hit sectors through targeted subsidies,” Chua said.
He added that the government also aims to assist in improving the resilience of business establishments under the new normal by providing technical assistance on business continuity planning and capacity building on new competencies, such as digital skills, digitalizing operations, and entrepreneurial mentoring, among others.
MISSI is a report that monitors the production, net sales, inventories, and capacity utilization of selected manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.
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