Manufacturing output recovers

 

By Rose de la Cruz

 

After a series of declines in the latter part of 2017, the manufacturing output began recovering in the beginning of 2018 by 21.9 percnet in January, higher than the 14.9 percent in January 2017.

 

In terms of value, the value of production index rose by 20.4 percent.

 

The Philippine Statistics Authority said sector increased by 20.4 percent “manufacturing output is expected to sustain growth in 2018 on the back of robust consumer demand, higher government consumption, and continued gains in investments.

 

The sustained momentum in global trade growth will also provide additional boost to manufacturing growth, particularly export-oriented sectors,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

 

Pernia explained that the growth of manufacturing was due to expansions in petroleum products, construction-related products, some export-oriented products, and food manufacturing.  These offset the declines in wood products, tobacco, transport equipment, and rubber and plastic products.

 

Pernia also noted that the industry firms’ outlook for the first quarter of 2018 remains optimistic as improvement in production capacity, new product lines, and enhanced marketing strategies are anticipated to increase both production and sales.

 

Higher consumer demand, particularly on manufactured goods, is also expected to continue with the increase in households’ disposable income due to the Tax Reform for Acceleration and Inclusion (TRAIN).

However, he noted that firms remain cautious on some risks to growth such as the exchange rate, higher global commodity prices and weather-related disturbances.

 

“The perceived negative effects, however, will be offset by improved infrastructure that is partly being financed by TRAIN.  Moreover, the succeeding packages of the TRAIN are intended to make our tax regime internationally-competitive.,” Pernia said.

 

“To support the upward growth trajectory of manufacturing, the government must create and maintain an environment that is conducive to innovation and entrepreneurship, and enhance the production capacity of local suppliers of raw materials and intermediate goods, especially micro, small and medium enterprises,” he added.

 

Pernia said that improving connectivity among production site, processing areas and markets, and continuing to pursue bureaucratic and regulatory reforms to reduce the cost of doing business across all levels of government must also be pursued.

 

MISSI is a report that monitors the production, net sales, inventories and capacity utilization of selected manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.

 

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