Manufacturing sector contracted 14% in April amid lower food production

The manufacturing sector declined 14 percent in April from a year ago, on double-digit decline in food production, data from the Philippine Statistics Authority show.

Results of the Monthly Integrated Survey of Selected Industries showed that the volume of production index fell 14 percent in April while the value of production index went down 10.8 percent.  This marked the sector’s fourth consecutive month of decline in 2019.

The National Economic and Development Authority said a strong whole-of-government approach was necessary to boost manufacturing growth amid the sector’s sluggish performance.

Economic Planning Secretary Ernesto Pernia
“Notwithstanding, manufacturing output is expected to recover supported by improved domestic demand in the coming months. Easing inflationary pressures, accelerated government spending on infrastructure and a more upbeat consumer outlook also provide additional support given expectations of additional income and availability of more jobs,” Economic Planning Secretary Ernesto Pernia said Tuesday.

“A strong whole-of-government―nay, whole-of-society―approach is needed to accelerate the growth of manufacturing and boost its contribution to industry growth,” he said.

He said the need of the food processing sector should be addressed as the sector accounted for the largest share among all manufacturing sub-sectors. This pointed to the critical importance of agriculture which, besides being the source of food, is also the feeder sector to the food manufacturing sub-sector.

Pernia said there was a need to address the governance issues faced by the agribusiness sector and its related industries.

Data showed that food manufacturing contracted 20.6 percent in April.  Other industry groups that registered double-digit annual declines were tobacco products (-29.2 percent), leather products (-25.5 percent), petroleum products (-24.3 percent), furniture and fixtures (-19.6 percent), basic metals (-16.2 percent) and transport equipment (-11.8 percent). 

“The government may need to revisit existing interventions to ensure that they are designed to be responsive to the needs and actual behavior of farmers, fisher folks and processors,” Pernia said.

The delineation of responsibilities across various food safety regulatory authorities should be clarified in order to improve the enforcement of regulations, he said.

“It must be ensured that all food products, both for domestic market consumption and for export, are aligned with Good Agricultural Practices or Good Manufacturing Practices,” said Pernia.

Pernia also pointed out the need to encourage businesses to increase production.  

“Transacting with the government must be simplified and made less expensive, as mandated by R.A, No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, ” he said.

The law calls for the standardization of requirements for business registrations and permit issuances and capacity-building to improve the efficiency of local government units in the processing of business applications.

Topics: Manufacturing sector , food production , Philippine Statistics Authority , National Economic and Development Authority , NEDA
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