Factory output rose in February at a slower pace of 8.4 percent, with furniture, food products and rubber leading the expansion, the National Economic and Development Authority said Tuesday.
Latest data from the Philippine Statistics Authority in its Monthly Integrated Survey of Selected Industries showed the volume of production index expanded at a lesser pace from 34.3 percent in January but rebounded from the 2.1-percent contraction year-on-year.
The Value of Production Index also recorded a modest growth of 2.8 percent in February from a decline of 7.6 percent decline on year.
“The manufacturing sector is expected to sustain growth this year because of our strong macroeconomic fundamentals, resilient domestic consumption, and upcoming national elections. There is a positive business outlook due to anticipated increases in gross revenues and net income of some of the country’s largest corporations,” said Economic Planning Secretary Emmanuel Esguerra.
Esguerra said the outlook increased the job opportunities, while stable prices of commodities, government assistance such as the Pantawid Pamilyang Pilipino Program and election-related spending would provide additional boost to domestic consumption.
The PSA noted significant increases in eight major sectors, namely furniture and fixtures, food manufacturing, rubber and plastic products, fabricated metal products, machinery except electrical, printing, non-metallic mineral products and electrical machinery.
Furniture and fixtures registered strong growth on the back of robust domestic demand, increasing in volume by 32.4 percent and value by 13.2 percent in February.
The food subsector sustained a double-digit growth in February, with a 26-percent and 25.8-percent expansion in volume and value of production, respectively.
“Driven by strong consumer spending and efficient distribution of goods, the growth in food production is expected to continue in the coming months as El Niño is anticipated to weaken and fade away during the second quarter of 2016,” said Esguerra.
On intermediate goods, rubber and plastic products increased 25.6 percent in volume and 1.5 percent in value of production.
The output of electric machinery expanded 16.3 percent and 8.3 percent in volume and value, respectively.
Esguerra said with low global oil prices, lower production costs would encourage expansion of manufacturing production.
“Thus, to maximize low oil prices, the government must ensure that stable macroeconomic fundamentals are sustained and measures to further reduce cost of doing business are continually pursued. Also, access to high-quality raw materials and reliable energy, logistics and other manufacturing-related services must be available to support robust growth of manufacturing output,” he said.
Esguerra added strategic investments in research and development must be pursued.