Philippine manufacturing industry bounces back in August 2015

The Philippine manufacturing industry bounced back in August 2015 after a three-month decline due to the vigorous construction activity and high demand for automotive products, says the National Economic and Development Authority (NEDA).

The Philippine Statistics Authority (PSA) reported a 3.7% increase in the volume of production index (VoPI), a big improvement from its performance in the past three months.

However, it remains behind the 5.7-percent growth it posted in the same month last year.

“We must continuously drive domestic demand to offset the low global demand and strengthen the link between the agriculture and manufacturing sectors to reduce the economy’s vulnerability to external supply shocks,” says Economic Planning Secretary Arsenio Balisacan.

Meanwhile, the Value of Production Index (VaPI) declined by 4.6 percent.

For consumer goods, manufacture of beverages is leading in the growth in value of net sales, as it posted a 19.1-percent growth in August.

Tobacco also posted a double-digit growth in both value and volume of net sales. On the other hand, the food subsector dropped further in both value and volume of net sales due to the persistent decline in the production values of vegetable or animal oils and fats, grain mill products, processed meat and fish, milk and dairy products.

For intermediate goods, wood posted a double-digit growth of 37.9 and 11.8 percent in volume and value of net sales.

Non-metallic mineral products sustained its double-digit growth at 28.6 and 21.1 in volume and value of net sales due to the continuing demand for construction-related materials from both the private and public sector.

Petroleum continued to slip, posting a 25.0-percent drop in value of net sales due to an oversupply in the global market.

On a positive note, NEDA expects production to increase in 2016 with the completion of a refinery master plan of a major corporation.

For capital goods, fabricated metal products grew by 22.3 and 24.2 percent in volume and value of net sales respectively.

However, net sales of basic metals continued to contract with 28.1 percent in volume and 37.9 percent in value due to the decrease in production and of non-ferrous metals and an oversupply of basic metals globally.

Secretary Balisacan is optimistic for the fourth quarter due to the expected boost in both production and sales of manufactured goods with the coming holiday season, campaign season for the 2016 elections, and the expansion of the business process outsourcing (BPO) industry.

“This, together with the improved employment situation, low inflation rate, declining oil prices and the sustained remittances from overseas Filipino workers, will support the business confidence in the coming months,” says Balisacan.