The Philippine manufacturing sector marked its 11th consecutive month in positive territory in November 2018 although it was the slowest reading in 2018 so far.
In its latest Monthly Integrated Survey of Selected Industries, the Philippine Statistics Authority reported that manufacturing’s Volume of Production Index rose by 1%, slower than 3.9% recorded in October but a reversal from 10.1% contraction a year ago.
The Value of Production Index, on the other hand, grew by 2.1%, down from October’s 3.1%, but from a contraction of 10.6% in November 2017.The November growth was supported by production increases in beverages, tobacco, petroleum, electrical machinery, textile, paper products, and miscellaneous manufactures.
“While the November outturn [showed] sustained positive growth for manufacturing, indices showed a declining trend starting [in] the second half of 2018,” Socioeconomic planning secretary Ernesto M. Pernia said in a statement.
He added that factory output is probably being dampened by less optimistic business and consumer outlook in the fourth quarter as reported in the latest Business and Consumer Expectations Surveys of the Bangko Sentral ng Pilipinas.
“The upside factors that can help improve consumer outlook and prop up demand are the sustained slowdown of inflation in December on the back of the decline in rice and oil prices, and a rollback in minimum jeepney fare,” the Cabinet official added.
NEDA expects the moderate inflationary pressures in the coming months to result in stronger consumer and investment demand, providing more opportunities for production expansion.
“We also expect that election-related spending will drive up manufacturing, particularly production of food, beverage, tobacco, printing and paper products,” Pernia said.
NEDA also expects that continued public investment in infrastructure will not only bode well for construction-related production but will also raise employment and disposable incomes.
Within the near to medium term, NEDA said the manufacturing sector will benefit from the passage of legislative bills, particularly the proposed amendments to the Foreign Investment Act, the Retail Trade Act, and the Public Service Act.
“In addition to the massive investments in infrastructure, these amendments will help attract foreign investments in manufacturing,” said Pernia.
