Factory output tumbled 10.1 percent in December from a year ago, ending an 11-month growth streak, as demand slowed after the holiday season, the National Economic and Development Authority said Tuesday.
Data from the Philippine Statistics Authority showed the volume of production index declined 10.1 percent year-on-year in December 2018, following a sluggish 1.6-percent increase in November. It was also weaker than the 6.1-percent contraction reported in December 2017.
This brought the 2018 full-year growth of manufacturing to 7.2 percent in terms of volume and 8 percent in terms of value, the PSA said.
“We have expected this decline because the holiday season is over. These figures could also indicate a likely tepid growth consistent with the latest Business and Consumer Expectations Survey of the Bangko Sentral ng Pilipinas,” Economic Planning Secretary and National Economic and Development Authority director-general Ernesto Pernia said.
Across product categories, lower output of major manufacturing items such as food, chemical products, tobacco, basic and fabricated metals and machinery (except electrical), dragged down total manufacturing output.
Neda said the decline in rice prices, downward adjustment of electricity rates and the slight appreciation of the peso could help improve consumer outlook and prop-up demand.
“Moreover, election-related spending is projected to benefit manufacturing subsectors such as food, beverage, tobacco and printing and paper products,” Pernia said. Julito G. Rada
Data showed that ten of the 20 industry groups registered year-on-year declines in December, with two-digit decreases noted in printing (-79.4 percent); chemical products (-28.9 percent); tobacco products (-22.1 percent); food manufacturing (-17.8 percent); basic metals (-16.7 percent); and machinery except electrical (-12.6 percent).
The value of production index also contracted 9.3 percent in December.
Pernia said election-related spending was expected to benefit manufacturing subsectors such as food, beverage, tobacco and printing and paper products in the coming months.
He also said the approval of the exemption of key infrastructure projects from the 2019 election spending ban would ensure continued implementation of national infrastructure projects under the ‘Build, Build, Build’ program and minimize slowdown in economic growth.
“Domestic oil price hikes and the upcoming El Niño could translate to price pass-throughs in manufacturing,” Pernia said.