July 05, 2019

MANILA – A stronger push for policies and programs that improve food production and public spending and that capacitate MSMEs is needed to strengthen manufacturing growth, the National Economic and Development Authority said.

In its Monthly Integrated Survey of Selected Industries (MISSI), the Philippine Statistics Authority (PSA) reported that the performance of manufacturing production continued to decline in May 2019.

Year-on-year growth of the Volume of Production Index (VoPI) decreased by 4.0 percent while the Value of Production Index (VaPI) contracted by 2.1 percent.  Nevertheless, this is a slight improvement compared to the previous month’s performance.

“Despite these negative figures, we note a positive development for this month’s manufacturing performance upon seeing that the number of gainers in both indices has outpaced the losers. For one, 14 subsectors trended upwards trend compared to last month’s 10 subsectors,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

Lower prices of rice and domestic oil prices, including downward adjustment in electricity rates are seen to temper inflation pressure in the month of June, which bodes well with producers of manufactured goods.

“More importantly, we need measures to boost the productivity of agriculture and strengthen supply chain linkages between local and foreign producers of raw food products and food manufacturers to increase food production. Food products, the largest subsector, has significant impact on the overall performance of the manufacturing sector,” the Cabinet official said.

In May 2019, the food manufacturing sub-sector’s VoPI declined by 14.0 percent while its VaPI decreased by 17.7 percent.

“The government’s rice farm mechanization program should be seamlessly implemented. This will make rice farming more efficient and productive. It will also drive up the demand for farm equipment, thereby improving manufacturing industry and create more jobs for Filipinos,” Pernia said.

Moreover, Pernia said that appropriate technology and capacity-building programs need to be geographically and financially accessible to MSMEs for them to reap the benefits of expanded market access.

“To increase the demand for consumer goods, government needs to accelerate public works spending and fast-track the implementation of socioeconomic programs,” he added.

To match this, he reiterates the importance of fully implementing RA No. 11032 or the “Ease of Doing Business and Efficient Government Service Delivery (EODB-EGSD) Act of 2018”. This is to standardize requirements for business registrations and permit issuances and ensure that LGUs are capacitated to efficiently handle processing of business applications.

Pernia also calls for the passage of a national quality infrastructure (NQI) bill, which also needs to be prioritized and fast-tracked before the end of the Plan period in 2022.  This will include the setting of standards and the necessary infrastructure that are aligned with international practice.  This will facilitate the access of domestic manufactures, including MSMEs, to world markets.

“These national standards need to be aligned with the dynamic demands of the global market to ensure that the country’s products are competitive with the rest of the world”, he said.