Factory output fell 4.1 percent in January from a year ago, pulled down by lower demand, data from the Philippine Statistics Authority show.
This represented the second straight month of decline, following an 11.9-percent slump in December.
Data showed that the volume of production index exhibited a year-on-year decrease of 4.1 percent in January, a reversal of 10.8-percent growth a year ago.
Twelve of the 20 major industry groups registered annual declines. The major industries that significantly influenced the decrease were furniture and fixtures and basic metals which fell 31.1 percent and 12 percent, respectively.
The value of production index also went down 0.7 percent in January following a 10.9-percent increase a year ago. The decrease in VaPI was brought about by the 11 industry groups led by basic metals with a double-digit drop of 13.5 percent.
Economic Planning Secretary Ernesto Pernia said the easing of inflationary pressures, especially on food following the recent signing of the law that modernizes the rice industry in the country, bodes well for overall manufacturing growth in the coming months.
“Manufacturing growth outturn in January 2019 showed a moderate improvement coming from December 2018. Nevertheless, with our recent progress in agricultural policy, we can expect manufacturing to recover further,” Pernia said. Julito G. Rada
“The decline in prices of rice and agricultural commodities brought about by the appreciation of peso and the increase in the supply of rice imports will improve consumer outlook and prop-up domestic demand,” he said.
Pernia said the recent passage of the Rice Industry Modernization Law was also expected to reduce the retail prices of rice and thereby further stabilize inflation. This may result in lowering the cost of inputs for the manufacturing sector and provide opportunities for production expansion, he said.
Pernia said pushed for other measures to attract new investments and reduce the cost of expanding the production capacity of existing firms.
These measures include the full implementation of the Ease of Doing Business-Efficient Government Service Delivery Act of 2018 to yield significant improvements in the business and regulatory environment across all levels of governance.
The economic team also pushes for the amendment to the Public Service Act to encourage competition in the air, maritime and road transport, as well as logistics services.
“The proposed amendment on the Foreign Investments Act of 1991 could be another boost to the manufacturing sector. Considered as a priority bill, it is expected to lower the employment threshold from 50 to 15 direct employees for foreigners investing $100,000 in SMEs,” Pernia said.
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.