November 10, 2o17
Decreases in the production of petroleum, transport equipment, and export-oriented products led to the decline in manufacturing output for September 2017, according to the National Economic and Development Authority.
In the Monthly Integrated Survey of Selected Industries (MISSI) for September 2017, the Volume of Production Index (VoPI) declined by 3.7 percent, a reversal from 11.2 percent last year while the Value of Production Index (VaPI) decreased by 4.3 percent.
This made the three-month moving average of VoPI and VaPI decline by 1.9 and 2.5 percent, respectively.
The decrease in the production volume of petroleum products is attributed to the lower production of coke and other fuel products while the contraction in transport equipment follows lower imports of raw materials.
For export-oriented products, declines were seen in the production volume of textiles, footwear and wearing apparel, chemicals, rubber and plastic, and wood products.
Production continued to grow, however, in construction-related manufactures and food manufacturing.
NEDA Officer-in-Charge (OIC) and Undersecretary Rosemarie Edillon, however, remained optimistic of a rebound in the manufacturing sector in the next quarter on the back of higher consumer confidence and optimistic business sentiment.
“The Consumer Expectation Survey of the Bangko Sentral ng Pilipinas reported high consumer outlook optimism for the fourth quarter, with respondents expecting additional income, employment opportunities, and improvement in the peace and order of the country,” Edillon said.
Also, the 2017 APEC CEO Survey results showed that Philippine top corporate officers and business specialists are “very confident” about their companies’ revenue growth in the next 12 months and are more likely to increase their investments in the country.
Edillon noted that efforts to enhance the ease of doing business in the country, as indicated in the Philippine Development Plan 2017-2022, need to be pursued to attract more investments in the manufacturing sector. Such efforts include online application procedures and electronic processing of transactions.
“Elimination of redundancy in the process and lowering the cost of doing business is expected to attract new entry players and expand existing firms,” she said.
A comprehensive credit information system also needs to be developed to help financial institutions make more informed lending decisions, particularly those related to cooperatives and micro and small enterprises.
Edillon explained that this should go hand in hand with efforts to implement an effective investment incentive system to attract more multinational manufacturers and parts suppliers to set up in the country.
Edillon is currently NEDA OIC while Socioeconomic Planning Secretary Ernesto Pernia is on official travel abroad.
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.