The National Economic and Development Authority (NEDA) said production of consumer-related manufactures, such as food and beverages, could be dampened by concerns over the coronavirus disease 2019 (COVID-19) affecting tourism activities in the country.
NEDA said this in a statement yesterday after the Philippine Statistics Authority (PSA) reported in its Monthly Integrated Survey of Selected Industries that the total manufacturing index posted its 14th consecutive month of decline in January 2020.
Year-on-year volume of production index and value of production index dropped by 1.6 percent and 6.3 percent, respectively.
However, the factory output index improved from the declines of 9.1 percent recorded in the previous month and 4.2 percent a year ago.
The decline in value of production likewise slowed from the drop of 8.7 percent in December 2019. However, during the same month of the previous year, it posted a slower decrease of 0.3 percent.
“Intensifying government’s actions to monitor and implement mitigating measures will temper the potential negative impact of the COVID-19 on the manufacturing industry,” Ernesto Pernia, socioeconomic planning secretary, said.
As the epidemic scare lingers, NEDA said output of firms that produce intermediate goods to overseas market will also be affected.
“Government needs to work closely with the industry in crafting and implementing strategies to effectively mitigate the possible impacts of COVID-19 on production,” Pernia said.
He said there is also a need to map out entire value chains across primary, secondary and tertiary players in the economy; understand where critical parts are sourced; identify alternative market sources; and beef up inventory capacity to insulate against vulnerabilities.
“To help the manufacturing industry become more competitive and resilient, relevant government agencies need to swiftly implement measures that would streamline processes, facilitate trade, and reduce transactions costs,” he said.
To reinforce business continuity plans, NEDA said government support will be needed for facilitating partnerships between micro, small and medium enterprises (MSMEs) and large domestic and/or foreign enterprises and for leveraging advanced manufacturing technologies to enable greater resilience of firms and MSMEs amid the challenges posed by COVID-19.
Meanwhile, Pernia said the recent eruption of Taal Volcano will also have a temporary impact on the manufacturing sector, given that CALABARZON accounts for about 31 percent of the country’s industry output.
Thus, over the immediate term, government will need to fast track the rehabilitation of public infrastructure to ensure speedy recovery of firms, establishments and households located in the area, NEDA said.
