Factory production rose 7.8% in March
Factory output rose 7.8 percent in March from a year ago, on increased domestic demand for food and tobacco, the National Economic and Development Authority said Wednesday.
Results of the monthly integrated survey of selected industries conducted by the Philippine Statistics Authority showed the growth in volume of production index in March was slower than 11.2 percent in February and 14.9 percent in March 2015.
Neda said despite the slowdown in manufacturing sector in March, the sector recorded a strong output in the first quarter.
“We attribute first-quarter growth to robust manufacturing production that was supported by strong household spending and sound macroeconomic fundamentals,” said Economic Planning Secretary Emmanuel Esguerra.
The value of production index recorded a 1.9-percent growth in March, picking up from the 5.6-percent decline recorded in February.
Neda said the first-quarter growth was supported by the increased production in food manufactures, electrical and non-electrical machineries and chemical products.
“The positive performance of the manufacturing sector is expected to continue and drive higher growth in the first semester of the year. The buoyant domestic demand, stable inflation, low power rates and continued decline in world crude oil prices will continue to support the growth of the sector, and at the same time, will help cushion the effect of slow global economic growth,” Esguerra said.
He also said the election-related spending was also providing an additional boost to the production output of paper and plastic products.
Tobacco production surged 82.6 percent both in terms of volume and value, suggesting continued robust demand for tobacco products.
Food production rose 15.3 percent and 16.3 percent in volume and value of production, respectively.
“The positive performance of the food sub-sector is a turnaround from the declines recorded in 2015. This was on the back of a strong domestic economy, lower raw material prices, better product mix, and improved production efficiencies,” Esguerra said.
Meanwhile, the strong growths posted by tobacco, food manufactures, paper, wood and metal products offset the double-digit declines in petroleum and leather products.
Esguerra said to support the continued growth of the manufacturing sector, there was a need to strengthen linkages between agriculture and manufacturing in strategic locations to create stable employment and reduce dependency on highly vulnerable economic activities.
“We must increase the productivity of agribusiness and manufacturing-related services through continued public investment in research and development. This will boost competitiveness and innovation across all production sectors,” he said.