Factory output shrinks 8.4%

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    The country’s factory output shrank for the seventh consecutive month in September, although at a slower pace versus the year-on-year decline in August, data from the Philippine Statistics Authority (PSA) showed.

    According to the latest Monthly Integrated Survey of Selected Industries released yesterday, the volume of production index for the manufacturing sector in September contracted at a slower rate of 8.4 percent compared with the 9 percent decrease in August 2020.

    In the same month in 2019, the year-on-year rate was at -6.5 percent.

    “The major contributory to the slower decline… were the two-digit expansions observed in basic metals and food manufacturing with annual increases of 14.4 percent and 10.2 percent, respectively,” the PSA said.

    “The slower drop in the indices of 10 industry groups also tapered off the rate of decline in the index for the sector,” it added.

    Meanwhile, the value of production index (VaPI) for manufacturing continued to exhibit a downtrend at an annual decline of 11.9 percent in September 2020, from a faster drop of 13.3 percent in the previous month.

    “The September 2020 figure was the seventh consecutive month that VaPI had a negative growth and the fifth straight month that it was declining at a slower rate,” the PSA said.
    In September 2019, VaPI dropped by 6.5 percent.

    “The slower downturn in the VaPI for the sector was influenced by the increases in the indices of four industry groups, namely, basic metals (12.3 percent), food manufacturing (11.6 percent), chemical products (5.6 percent) and miscellaneous manufactures (1.6 percent),” the PSA said.

    Contributing further to the slower drop in September 2020 for the sector was the slower decreases in the indices of 10 industry groups, it added.

    “As we continue our efforts to manage the coronavirus disease 2019 (COVID-19) pandemic, measures to support businesses and consumers in Bayanihan 2 will help the economy recover faster,” Karl Kendrick Chua, National Economic and Development Authority (NEDA) acting secretary, said in a separate statement yesterday.

    “The government needs to pass the remaining recovery programs – the Corporate Recovery and Tax Incentives for Enterprises bill, the Government Financial Institutions Unified Initiative to Distressed Enterprises for Economic Recovery bill and the Financial Institutions Strategy Transfer bill – which will further support COVID-affected sectors recover faster, while promoting the resurgence of trade,” he added.

    Other reforms that NEDA is pushing include legislative measures that seek to amend the Public Service Act, Foreign Investment Act and the Retail Trade Liberalization Act.

    These are expected to spur investments in logistics and critical infrastructure that will help exporters increase productivity and competitiveness, NEDA said.