Manufacturing output to sustain growth in H1

NEDA forecast

anufacturing output for the first quarter this year continued to post strong growth and is seen to continue in the coming months.

“The positive performance of manufacturing is expected to continue in the first semester, amid the sustained economic growth momentum, increased net foreign direct investments, higher OFW cash remittances, and favorable merchandise trade,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

In the Monthly Integrated Survey of Selected Industries (MISSI) of the Philippine Statistics Authority, the Volume of Production Index (VoPI) for manufacturing grew by 13.6 percent in March 2018, slightly higher than the 12.3 percent registered in the previous year.

The Value of Production Index (VaPI) likewise increased by 12.8 percent. This led to the three-month moving average growth rate of both indexes to remain in positive territory at 18.6 and 17.6 percent, respectively.

“The strong growth of the sector is also seen to provide additional boost to first quarter industry gross value added,” Pernia said.

The robust manufacturing production for the first quarter of 2018 is supported by the increased production in food manufacturing, petroleum products, electrical machinery, and non-metallic mineral products.

The growth in construction-related manufactures continued to post an upward trend due to higher demand for non-metallic mineral products, particularly cement. This can be attributed to the continued implementation of public infrastructure projects.

Programmed public spending on infrastructure increased by 6.3 percent in 2018 from 5.4 percent in 2017, comprising 25.4 percent of the national budget.

“However, risks to production, such as in intermediate goods, are anticipated due to rising global oil prices as the Organization of Petroleum Exporting Countries (OPEC), Russia and other oil producers are expected to cut their supply until the end of 2018,” Pernia said.

In order to sustain the growth of the sector, the NEDA chief sees the need to encourage the expansion or entry of firms in industries that are nearing full capacity.

He also encourages to prioritize initiatives that will harness the potential of science, technology and innovation (STI), and to create and sustain an enabling environment for businesses to thrive.