The Philippine manufacturing sector continues to record decreases in both volume and value in October 2019, its 11th month in a row of decline, according to the Philippine Statistics Authority (PSA).
Based on the preliminary result of PSA’s Monthly Integrated Survey of Selected Industries (MISSI), the Volume of Production Index (VoPI) fell 3.7% in October 2019 from the 2.9% growth in the same month last year.
The Value of Production Index (VaPI) likewise dropped, contracting 4.3% from the 4.1% increase in October 2018.
The decline of VoPI in October 2019 can be attributed to the decreases in the indices of nine major industry groups led by furniture and fixtures (-32.0%), miscellaneous manufactures (-23.0%), petroleum products (-17.5%), and electrical machinery (-17.3%).
The two-digit decreases in five of the nine major industries also resulted in the slowdown in VaPI. These are petroleum products (-25.6%), miscellaneous manufactures (-22.3%), electrical machinery (-20.4%), basic metals (-13.5%), and textiles (-10.8%).
The National Economic and Development Authority (NEDA) said the extension in the validity of the 2019 national budget and the timely passage of the 2020 General Appropriations Act (GAA) are needed to sustain the implementation of construction-related activities and help drive growth in the manufacturing sector.
“Despite manufacturing’s performance, business and consumer outlook remains positive with the anticipation of higher consumer spending during the holiday season, a much favorable macroeconomic condition, and a likely recovery in government spending on infrastructure,” NEDA undersecretary for regional development Adoracion M. Navarro said in a statement.
She added that the proposal to extend the validity of the 2019 budget is a welcome move to make up for the delayed 2019 GAA. Likewise, the passage of the proposed 2020 national budget by the end of the year is important to sustain construction-related activities.
“The extension in the validity of the 2019 budget is important not just for the construction of infrastructure projects but also for critical pre-feasibility, feasibility, and other project development studies,” said Navarro.
Furthermore, she said that accelerating the implementation of the infrastructure development programs and continued investment in human capital development in the remaining months of 2019 is critical to achieving the national government’s targeted disbursement.
“We are glad that the Department of Public Works and Highways and other infrastructure-focused agencies, the Department of Education, and the Department of Social Welfare and Development have signified commitment to accelerate their respective disbursements for the rest of the year,” said Navarro.
The NEDA official also said that fast-tracking the passage of the Corporate Income Tax and Incentives Rationalization Act, and the proposed amendments to the Foreign Investments Act, Public Service Act, and Retail Trade Act are highly supported to help eliminate policy uncertainties and enable investment and business expansions in the country.