Business, consumer confidence to buoy manufacturing

OPTIMISTIC business sentiment and stable consumer confidence are seen to support the further growth of the manufacturing sector towards the end of the second quarter of 2018, the National Economic and Development Authority said.

The Monthly Integrated Survey of Selected Industries (MISSI) for May 2018 of the Philippine Statistics Authority reported that both the Volume of Production Index (VoPI) and Value of Production Index (VaPI) for manufacturing significantly bounced back from declines last year.

“Higher demand due to school enrollment and harvest periods, expansion of businesses and new product lines, and ongoing rollout of public infrastructure projects are anticipated to further increase manufacturing production,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

VoPI grew by 19.8 percent in May 2018 from a 0.6-percent drop last year while VaPI recovered to a 21.3 percent year-on-year growth from a 2.6-percent decline in May 2017.

Particularly, expansions in food manufacturing, petroleum products, construction-related manufactures, export-oriented products, and transport equipment supported this growth in the period.

Meanwhile, the Cabinet official added that the manufacturing sector will also benefit from the recently ratified free trade agreement (FTA) between the Philippines and the European Free Trade Association (EFTA).

“This will provide additional boost to economic activities between the country and the EFTA member states,” Pernia said.

Upon the FTA’s entry into force, the EFTA member states will accord duty-free market access to all industrial and fishery products from the Philippines.

“Despite the optimism, the government must not waiver in addressing factors that may hamper growth, including rising trade tensions and higher interest rates. Enhancing the production capacity of enterprises and addressing infrastructure gaps to decrease production costs will be important,” he said.

Pernia added that providing workers with the required knowledge and skills will support growth in this sector.