MANILA — The country’s chief economist on Wednesday expressed optimism on the recovery of manufacturing production this year following three consecutive months of decline since September 2017.
In its latest Monthly Integrated Survey of Selected Industries (MISSI), the Philippines Statistics Authority (PSA) said the volume of production index (VoPI) for manufacturing contracted by 8.1 percent in November 2017.
The value of production index (VaPI) also decreased by 9.3 percent, leaving a three-month moving average of VoPI and VaPI of 2.5 percent and 1.5 percent, respectively.
“Despite the recent performance of the manufacturing sector, we remain optimistic given strong domestic and external demand. There are also considerable public and private investments in the country,” National Economic and Development Authority (NEDA) Director-General and Socioeconomic Planning Secretary Ernesto Pernia said in a statement.
Pernia is banking on the country’s infrastructure development—through the Build, Build, Build program—and a higher take-home pay of Filipinos under the new tax reform law, boosting domestic demand in 2018.
He said manufacturing could also benefit from the country’s BBB, or “good quality” credit rating, as this reflects the country’s strong and consistent macroeconomic performance and high investor confidence.
The NEDA chief noted credit rating upgrade may also introduce lower cost of financing projects.
To support the growth of the sector, Pernia underscored the need to address long-standing issues of high power and shipping costs, dependence on imported raw materials and intermediate goods, incidence of illicit trade and the lack of adequate support infrastructure.
He stressed that key to the recovery of manufacturing was the earnest efforts of government to reduce unnecessary regulatory burden.
Meanwhile, the decrease in manufacturing production volume in November 2017 can be partly attributed to the lower output of tobacco following the implementation of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN), which imposes additional excise tax on tobacco products starting this month.
Production volume and value of manufactured food also declined due to decreases in the production value of milk and dairy products, milled and refined sugar, bakery products, and processed fruits and vegetables.
The production volume of transport equipment and value of petroleum products increased during the month. (PNA)
