PHL factory output drops for 4th straight month in March

The Philippine manufacturing output dropped for the fourth consecutive month in March, as several industries noted a double-digit decline in production during the month.

Preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI) of the Philippine Statistics Authority (PSA) released Tuesday showed that the March factory output or the Volume of Production Index (VoPI) fell by 9.2% in March.

This compares with the 11.0% growth registered in March 2018, and the 8.5% contraction recorded in February.

"Eight major industry groups pulled down the annual VoPI led by furniture and fixtures, food manufacturing, and petroleum products," the PSA said in an accompanying statement.

PSA data showed that the volume of production of furniture and fixtures fell by 25.5%; food manufacturing by 17.3%, and petroleum products by 17.2%.

Drops were also registered in the volume of production of non-metallic mineral products (-5.7%), basic metals (-4.6%), tobacco products (-3.8%), and leather products (-1.9%).

In terms of value, the Value of Production Index (VaPI) decreased at an annual rate of 5.4% in March, a reversal of the 10.5% growth the same month last year.

"The decline of VaPI in March 2019 can be attributed to the decreases in the indices of three major industry groups led by food manufacturing," the PSA said.

Drops were recorded in the value of production of food manufacturing (-20.3%), petroleum products (-13.2%), and basic metals (-9.1%).

Moving forward, the National Economic and Development Authority (NEDA) said the figures are expected to improve in the coming months, given the seasonal demand during summer.

"We expect the figures to improve in the coming months as we see increase in demand during summer, given the rise in the number of local and foreign tourists, easing of inflation, and increase in election-related spending," Socioeconomic Planning Secretary Ernesto M. Pernia said in a separate statement.

"Government spending on infrastructure and other government services is also likely to catch up."

The government plans to spend over P8 trillion in its Build, Build, Build program infrastructure projects until 2022, largely funded by government revenues from taxes.

However, Pernia flagged that the El Niño could feed into a hike in power and water rates, both said to be essential inputs to the manufacturing sector.

"Upward pressures on domestic oil prices and slight adjustment in electricity rate are expected to exert upward price pressures on the cost of inputs. Nonetheless, the continued decline in the price of rice and peso appreciation may partly be offsetting factors," he said.  — RSJ/KBK, GMA News