THE manufacturing sector is showing signs of recovery as reflected in its May performance, banking on the demand for essentials due to the Covid-19 pandemic.
The National Economic and Development Authority, in a statement, said the sector is expected to continue its rebound as the Philippine economy gradually reopens.
“To support local manufacturing, the 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,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a statement.
Mandaue Chamber of Commerce and Industry president Steven Yu said in terms of production value, most of the manufacturing companies are now into producing essential items and those under Philippine Economic Processing Zone Authority (Peza) have increased production.
“When the lockdowns started in March, most got affected. Peza was affected by the supply of raw materials, among others. Essentials were also taken by surprise, and were affected. As we gradually reopen and redefine the businesses allowed to open, naturally, there will be a resurgence in production,” he said.
Yu said the situation is improving.
“For Mandaue City, we are producing more essentials now and the production is back to 60 to 70 percent pre-Covid levels on the average,” he said.
Neda said the recovery is seen in the increase in capacity utilization, as reported by the Philippine Statistics Authority 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, capacity utilization of some of the largest sub-groups food and beverage manufacturing increased to 76.6 and 67.0 percent in May compared to April 2020, at 76.2 and 30.9 percent, respectively. Capacity utilization refers to the extent or level to which the productive capacity of a plant, firm or country is being used in generation of goods and services.
In addition, while year-on-year volume of production index (Vopi) and value of production index (Vapi) declined by 40.3 percent and 42.1 percent, respectively, in May, they are better than the revised Vopi and Vapi of -43.6 and -45.5 recorded in April 2020.
Despite the dampened outlook, the latest results of the Purchasing Managers’ Index (PMI) points to an improved manufacturing performance moving forward as the PMI rises from 40.1 in May to 49.7 in June. PMI is an indicator of economic health for the manufacturing sector.
“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. 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,” Chua said. (JOB with PR)