Factory output contracts faster in October — PSA

Manufacturing output declined at a faster pace in October as capacity utilization among producers fell during the month, according to the Philippine Statistics Authority (PSA).

Factory output, as measured by the Volume of Production Index (VoPI), contracted by 11.3 percent in October from a decline of 8.6 percent in September.

The Value of Production Index (VaPI) likewise declined at a faster clip of 14.2 percent in October from a contraction of 12.4 percent in September.

Contributing to the faster decline in production were reductions in the indexes of 15 industry groups led by petroleum products, printing and tobacco products.

In October, the average capacity utilization rate for the manufacturing sector fell to 67.2 percent from 69.2 percent in the previous month.

Seven of the 20 industry groups had at least 80 percent average capacity utilization rate which was led by machinery except electrical (91.3 percent), followed by electrical machinery (87.4 percent), and non-metallic mineral products (86.0 percent).

Only about a fifth (21.6 percent) of responding establishments operated at full capacity during the month.

Around 21 percent, meanwhile, operated at capacity of between 80 to 90 percent. The rest operated at 70 percent capacity and below.

Starting October, the trade department allowed more sectors to expand capacity to between 75 percent and 100 percent.

The transportation department also issued guidelines to increase the capacity of public transportation, enabling more workers to return to their jobs. In the early part of the lockdown, this was a huge problem for industries as workers could not report for duty.

These are all in line with the government’s changing the pandemic response from total risk avoidance to risk management, taking into consideration that majority of the COVID-19 cases in the country have mild symptoms or are symptomatic and the death rate is low.