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Sun.Star Cagayan de Oro - - Business -

MAN­U­FAC­TUR­ING out­put is ex­pected to re­cover in 2018 fol­low­ing three con­sec­u­tive months of de­cline since Septem­ber. In the Monthly In­te­grated Sur­vey of Se­lected In­dus­tries (MISSI) of the Philip­pines Statis­tics Author­ity (PSA), the Vol­ume of Pro­duc­tion In­dex (VoPI) for man­u­fac­tur­ing con­tracted by 8.1 per­cent in Novem­ber.

The Value of Pro­duc­tion In­dex (VaPI) like­wise de­creased by 9.3 per­cent, leav­ing a three-month mov­ing av­er­age of VoPI and VaPI of 2.5 per­cent and 1.5 per­cent, re­spec­tively. “De­spite the re­cent per­for­mance of the man­u­fac­tur­ing sec­tor, we re­main op­ti­mistic given strong do­mes­tic and ex­ter­nal de­mand.

There are also con­sid­er­able pub­lic and pri­vate in­vest­ments in the coun­try,” So­cioe­co­nomic Plan­ning Sec­re­tary Ernesto M. Per­nia said. He ex­plained that do­mes­tic de­mand, in par­tic­u­lar, may be higher in 2018 due to the coun­try’s in­fra­struc­ture de­vel­op­ment—through the Build, Build, Build pro­gram— and a higher take-home pay of Filipinos due to the tax re­form law. The de­crease in pro­duc­tion vol­ume can be partly at­trib­uted to the lower pro­duc­tion of to­bacco fol­low­ing the im­ple­men­ta­tion of the first pack­age of the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN), which im­poses ad­di­tional ex­cise tax on to­bacco prod­ucts be­gin­ning this month.

Pro­duc­tion vol­ume and value of man­u­fac­tured food also de­clined in Novem­ber, due to de­creases in the pro­duc­tion value of milk and dairy prod­ucts, milled and re­fined sugar, bak­ery prod­ucts, and pro­cessed fruits and veg­eta­bles. Mean­while, the pro­duc­tion vol­ume of trans­port equip­ment picked up in Novem­ber af­ter post­ing pos­i­tive but slower growth rates in Septem­ber and Oc­to­ber, re­flect­ing con­sumers’ an­tic­i­pa­tion of price in­creases with the im­ple­men­ta­tion of TRAIN. Pro­duc­tion value of petroleum prod­ucts also in­creased.

This was driven by the dou­ble-digit growth in re­fined petroleum prod­ucts, fol­low­ing price ad­just­ments in the global mar­ket re­sult­ing from strong de­mand from In­done­sia, Viet­nam and China.

“To sup­port the growth of the sec­tor, we must con­tinue to ad­dress long-stand­ing is­sues of high power and ship­ping costs, de­pen­dence on im­ported raw ma­te­ri­als and in­ter­me­di­ate goods, in­ci­dence of il­licit trade, and the lack of ad­e­quate sup­port in­fra­struc­ture,” Per­nia said, ex­plain­ing that key to the re­cov­ery of man­u­fac­tur­ing is the earnest ef­forts of gov­ern­ment to re­duce un­nec­es­sary reg­u­la­tory bur­den. He added that man­u­fac­tur­ing can ben­e­fit from the coun­try’s BBB or “good qual­ity” credit rat­ing, as this re­flects the coun­try’s strong and con­sis­tent macroe­co­nomic per­for­mance, and high in­vestor con­fi­dence. The credit rat­ing up­grade may also in­tro­duce lower cost of fi­nanc­ing projects.

Per­nia also noted that ini­tia­tives to spur and foster in­dus­try in­no­va­tion must be pri­or­i­tized to usher the sec­tor to­wards sus­tain­able pro­duc­tion prac­tices and to en­sure do­mes­tic firms re­main com­pet­i­tive to take ad­van­tage of deep­en­ing re­gional in­te­gra­tion. (PR)

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