Factory production fell 4 percent in May from a year ago, dragged down by the lower output of the food and furniture sectors, data from the Philippine Statistics Authority show.
Preliminary results of the Monthly Integrated Survey of Selected Industries showed that the volume of production index decreased by 4 percent in May, following a 13-percent expansion a year ago.
The value of production index also dropped 2.1 percent in May, a reversal of the 14.8-percent growth in the same month last year.
The decline in VoPI was dragged down by the 35-percent drop in furniture and fixtures and the 14-percent decline in food manufacturing.
Economic Planning Secretary Ernesto Pernia said a stronger push for policies and programs that improve food production and public spending and that capacitate MSMEs was needed to strengthen the manufacturing sector.
“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. For one, 14 subsectors trended upwards trend compared to last month’s 10 subsectors,” Pernia said.
He said the lower prices of rice and domestic oil prices, including downward adjustment in electricity rates, tempered inflation pressure in June, which bodes well with producers of manufactured goods.
Data showed that inflation in June 2eased to a 22-month low of 2.7 percent.
“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 a significant impact on the overall performance of the manufacturing sector,” Pernia said.