The Philippine manufacturing sector recorded decreases in both volume and value in May 2019, its sixth month in a row of decline, according to the Philippine Statistics Authority (PSA).
In its latest Monthly Integrated Survey of Selected Industries (MISSI), PSA reported that the Volume of Production Index (VoPI) and Value of Production Index (VaPI) in May 2019 dropped 4% and 2.1%, respectively, year-on-year. This is in contrast to the 19.8% growth in VoPI and 21.3% increase in VaPI in May 2018.
Six major industry groups registered annual decreases with furniture and fixtures, and food manufacturing posting the highest annual declines of 35% and 14%, respectively, resulting in the decline in VoPI.
The downtrend for VaPi, meanwhile, was due to the annual decreases observed in seven major industry groups, with two-digit negative annual rates for four groups: leather products (-18.3%), food manufacturing (-17.7%), miscellaneous manufactures (-15.6%), and basic metals (-13.5%).
The National Economic and Development Authority (NEDA) said manufacturing output is expected to recover, supported by improved domestic demand in the coming months.
“Easing inflationary pressures, accelerated government spending on infrastructure, and a more upbeat consumer outlook also provide additional support given expectations of additional income and availability of more jobs,” Socioeconomic Planning Secretary Ernesto M. Pernia said in an earlier statement.
“A strong whole-of-government—nay, whole-of-society—approach is needed to accelerate the growth of manufacturing and boost its contribution to industry growth. The needs of the food processing sector should be addressed as it accounts for the largest share among all manufacturing sub-sectors. This points to the critical importance of agriculture which, besides being the source of food, is also the feeder sector to the food manufacturing sub-sector,” he added.
Pernia said there is a need to address the governance issues faced by the agribusiness sector and its related industries.
“The government may need to revisit existing interventions to ensure that they are designed to be responsive to the needs and actual behavior of farmers, fisher folks and processors,” he said.
The delineation of responsibilities across various food safety regulatory authorities should be clarified in order to improve the enforcement of regulations.
“It must be ensured that all food products, both for domestic market consumption and for export, are aligned with Good Agricultural Practices or Good Manufacturing Practices,” said Pernia.
Moreover, Pernia stressed the need to encourage businesses to increase production.
“Transacting with government must be simplified and made less expensive, as mandated by RA No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018,” he said.
In addition, the law calls for the standardization of requirements for business registrations and permit issuances, and capacity-building to improve the efficiency of local government units in processing business applications.