The Philippine manufacturing sector continued its growth in February 2016, reflecting increased production of furniture, food products, and rubber, as the sector appears on track to experience sustained growth this year.
In the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries for February 2016, the Volume of Production Index (VoPI) grew 8.4%, a turnaround from the 2.1% decline recorded in February 2015.
Similarly, the Value of Production Index (VaPI) recorded a modest growth of 2.8%, rebounding from the 7.6% drop recorded in the same period last year.
“The manufacturing sector is expected to sustain growth this year because of our strong macroeconomic fundamentals, resilient domestic consumption, and upcoming national elections. There is a positive business outlook due to anticipated increases in gross revenues and net income of some of the country’s largest corporations,” Socioeconomic Planning Secretary Emmanuel F. Esguerra said in a statement.
He added that this scenario increases the availability of jobs while stable prices of commodities, government assistance such as the Pantawid Pamilyang Pilipino Program, and election-related spending also provide an additional boost to domestic consumption.
For consumer goods, furniture and fixtures recorded strong growth on the back of robust domestic demand, posting an increase in volume of 32.4% and value of 13.2% in February 2016.
Likewise, the food subsector sustained double-digit growth in February, posting a 26% and 25.8% growth rate in volume and value of production, respectively.
“Driven by strong consumer spending and efficient distribution of goods, the growth in food production is expected to continue in the coming months as El Niño is anticipated to weaken and fade away during the second quarter of 2016,” Esguerra, who is also National Economic and Development Authority (NEDA) director-general, noted.
For intermediate goods, rubber and plastic products posted a double-digit growth of 25.6% in volume and 1.5% growth in value of production. For capital goods, electric machinery grew by 16.3% and 8.3% in volume and value, respectively.
Esguerra also said that with low global oil prices, lower production costs will encourage expansion of manufacturing production.
“Thus, to maximize low oil prices, the government must ensure that stable macroeconomic fundamentals are sustained and measures to further reduce cost of doing business are continually pursued. Also, access to high-quality raw materials and reliable energy, logistics and other manufacturing-related services must be available to support robust growth of manufacturing output,” he said.
Esguerra added that strategic investments in research and development must be pursued. The development of new products and services and the improvement of existing ones will enhance the competitiveness of local players in the global market.
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