The manufacturing sector posted another double-digit decline in May amid the coronavirus disease 2019 (COVID-19) pandemic.
The National Economic and Development Authority (NEDA) however said the industry is already showing signs of recovery and is expected to continue its rebound as the Philippine economy gradually reopens.
The Philippine Statistics Authority (PSA) yesterday reported the volume of production index (VoPI) and value of production index (VaPI) declined by 40.3 percent and 42.1 percent, respectively, in May.
Still, these are better than the VoPI of -43.6 percent and VaPI of -45.5 recorded in April 2020.
NEDA said the recovery is seen in the increase in capacity utilization, as reported by PSA in its monthly integrated survey of selected industries.
As a whole, capacity utilization increased to 73.4 percent in May compared to 71.2 percent in April.
In particular, NEDA said in a statement capacity utilization of some of the largest sub-groups food and beverage manufacturing increased to 76.6 and 67 percent in May, compared to April at 76.2 and 30.9 percent, respectively.
“The low production and sales indices for the manufacturing sector are expected given that most of the country was still on enhanced community quarantine in May. Demand was also subdued as people’s mobility remains limited,” Karl Kendrick Chua, acting socioeconomic planning secretary, said in the statement.
“Despite this, we are seeing some signs of resurgence of the sector. As we transition to a new normal, we expect gradual recovery with improvements in logistics, particularly in the transport of essential goods and raw materials,” he added.
To support local manufacturing, Chua said government will facilitate and support manufacturing firms that will redirect production to increase the supply of essential goods and intermediate inputs, particularly for increasing the country’s capacity to address health and medical needs amid the COVID-19 pandemic.
New infrastructure projects in areas such as health, digital economy, digital education and power will be prioritized, NEDA said.
This will help increase construction activities and boost employment as well as increase demand on construction-related manufactures, it added.
As majority of the country’s micro, small and medium enterprises have experienced significant financial difficulties, Chua said the government will also continue to provide assistance through grants, low interest loans, credit guarantee, among others, to enable enterprises to safely resume business operations.
“As more firms reopen, we need to remind everyone that the risk of COVID-19 infection remains. It is very important for firms to strictly comply with minimum health standards to mitigate risks in the workplace. We need to make sure that our workers’ health is not compromised and that we are able to contain the spread of the virus,” the NEDA chief said.
