Manufacturing index declines in May

July 5, 2019

The Philippine Statistics Authority (PSA) said Friday manufacturing production continued to decline in May.

Year-on-year growth of the Volume of Production Index (VoPI) decreased by 4 percent while the Value of Production Index (VaPI) contracted by 2.1 percent.

“Despite these negative figures, we note a positive development for this month’s manufacturing performance upon seeing that the number of gainers in both indices has outpaced the losers,'' Socioeconomic Planning Secretary Ernesto Pernia said.

For one, 14 subsectors trended upwards trend compared to last month’s 10 subsectors,” he added.

Lower prices of rice and domestic oil prices, including downward adjustment in electricity rates are seen to temper inflation pressure in  June, which bodes well with producers of manufactured goods.

“More importantly, we need measures to boost the productivity of agriculture and strengthen supply chain linkages between local and foreign producers of raw food products and food manufacturers to increase food production. Food products, the largest subsector, has significant impact on the overall performance of the manufacturing sector,” Pernia said.

In May 2019, the food manufacturing sub-sector’s VoPI declined by 14.0 percent while its VaPI decreased by 17.7 percent.

“The government’s rice farm mechanization program should be seamlessly implemented. This will make rice farming more efficient and productive. It will also drive up the demand for farm equipment, thereby improving manufacturing industry and create more jobs for Filipinos,” Pernia said.

Pernia said appropriate technology and capacity-building programs need to be geographically and financially accessible to MSMEs to reap benefits of expanded market access.

“To increase the demand for consumer goods, government needs to accelerate public works spending and fast-track the implementation of socioeconomic programs,” he added. DMS