By Jochebed B. Gonzales
Senior Researcher
INDUSTRIAL OUTPUT continued to expand in the double digits in June but slowed to 18% compared to a month earlier, the Philippine Statistics Authority (PSA) reported.
According to preliminary results from the PSA’s Monthly Integrated Survey of Selected Industries, factory output, as measured by the Volume of Production Index (VoPI), rose by 18% year on year, against the revised 21% growth in output for May. The June result was a reversal from the 0.1% contraction in June 2017.
In the six months to June, factory output growth averaged 20.6%, significantly higher than the 6.1% posted a year earlier.
The printing industry’s output growth topped the table in June at 116.3%, followed by petroleum products (60.7%) and textiles (36.7%).
Other segments with notable gains were: miscellaneous manufactures (21%), rubber and plastic products (20.7%), machinery except electrical (20.3%), electrical machinery (17.1%), food manufacturing (14.7%) and beverages (10.1%).
Capacity utilization in June averaged 84.3%, with 12 of the 20 sectors tracked registering utilization rates of at least 80%.
“Robust domestic and higher external demand, increased investments and OFW (overseas Filipino worker) remittances, improved consumer confidence, and stable business confidence backed this growth in manufacturing,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted as saying in a statement issued by the National Economic and Development Authority (NEDA).
NEDA noted that despite growth easing in the production of construction-related manufactures, net sales of cement, glass products and basic metals also rose in the double digits in June, at 10.1%, 15.8% and 29.8%, respectively.
“The increased production of construction-related manufactures was in response to the continued demand for non-residential buildings such as industrial, commercial and institutional buildings,” NEDA added.
Asked for comment, Union Bank of the Philippines chief economist Ruben Carlo O. Asuncion attributed the expansion in manufacturing activity to robust household and government spending.
“I really think that increasing domestic demand from increasing government spending and domestic consumption has greatly contributed to this sustained six-month double-digit growth,” he said.
“If the planned government spending continues to roll out and be absorbed by the economy, the Philippine manufacturing sector will continue to develop at its current double-digit pace,” he said, adding that infrastructure expenditure contribute to the expansion in manufacturing production.
