The Philippines’ manufacturing sector continues to grow as both production and net sales posted vast improvements in April 2016 compared to a year ago, according to the National Economic and Development Authority (NEDA).
In the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries for April 2016, the Volume of Production Index grew 10.5%, a significant jump from the 1.8% growth posted in the same month last year.
The Value of Production Index recorded a 6.8% growth in April 2016, a huge turnaround from a 6.4% decline in April 2015.
“Manufacturing output grew stronger at the onset of the second quarter, driven by robust domestic activities during the election season,” Socioeconomic Planning Secretary Dr Emmanuel F. Esguerra said in a statement.
Likewise, the Volume of Net Sales Index grew 5.3% in April 2016 from 1.3% last year, while the Value of Net Sales Index returned to positive territory of 1.8% growth from a 6.8% decline in the same month in 2015.
“A bullish business outlook is expected for the second quarter. Higher production volume is anticipated across manufacturing sub-sectors due to the typical increase in demand during summer season and enrollment periods,” the Cabinet official said.
Esguerra, who is also NEDA director-general, added that the stable inflation and interest rates and sustained foreign investment flows will further support the favorable outlook for the manufacturing sector.
“But still, risks to production growth are anticipated with the possible occurrence of La Niña by the end of the year and the potential recovery of oil prices,” he emphasized.
The manufacturing sector’s growth benefited from the robust production of machinery, food manufactures, transport equipment, printing products, and export-oriented goods.
“Some of these can be attributed to election-related activities and strong domestic consumption,” Esguerra said.
The manufacturing industry’s average capacity utilization remained at 83.4%. Among surveyed manufacturing firms, 24.1% of the establishments operated at full capacity (90% to 100%). Also, about 58.2% operated at 70% to 89% capacity, while 17.7% operated below 70% capacity.
“Current initiatives to sustain the strong performance of the manufacturing sector and to enhance the capacity of industry to be the main growth driver of the economy must be continued,” the NEDA official said.
These initiatives include simplifying costly regulatory and bureaucratic procedures, closely monitoring industry roadmaps, and augmenting public and private investments in research and development.
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