By Chino S. Leyco
Strong economic growth will further expand manufacturing production on the back of continued government reforms for the economy, the National Economic and Development Authority (NEDA) said yesterday.
In the Monthly Integrated Survey of Selected Industries (MISSI) of the Philippine Statistics Authority, the Volume of Production Index (VoPI) for manufacturing grew by 24.8 percent in February this year, higher than the 9.8 percent registered in the previous year.
This signals a continued improvement from its slowdown since the second quarter of 2017, the NEDA said.
“The increasing working-age population, rising productivity, improvement in business environment, and aggressive infrastructure development will also help spur growth in the sector,” Socioeconomic Planning Undersecretary Rosemarie G. Edillon said.
The Value of Production Index (VaPI), likewise increased by 23.6 percent. This led to the three-month moving average growth rate of both indexes remain to the positive territory at 12.9 and 11.7 percent.
“The industries’ outlook for both the current and succeeding quarters remains bullish with the expectation of sustained robust demand, improvement in production capacity, new product lines, and enhanced marketing strategies,” she said.
This positive business sentiment of Philippine industries mirrored the high business confidence among Asian companies for the first quarter of 2018.
“However, risks to growth remain. The government must remain cautious of increasing inflation which may lead to higher cost of production for manufacturing firms. Strategies are needed to be pursued to sustain the upward growth trajectory of the manufacturing sector,” Edillon noted.
She said that to attain this, the government needs to encourage all forms of innovation in manufacturing and manufacturing-related services, and to enhance the capacity of domestic firms especially micro, small and medium enterprises. “We need these initiatives to produce raw materials and intermediate goods that meet the requirements of international markets,” Edillon said.
“We also need to pursue bureaucratic and regulatory reforms that incentivize compliance across all levels of government to eliminate red tape and reduce the cost of doing business,” she added.