MANILA, Philippines — Native manufacturing unit output progress eased in 2024, with the sector unable to squeeze out a strong enlargement in the course of the vacation season as producers grappled with provide issues and subdued demand at house and overseas.
A month-to-month survey of chosen industries confirmed manufacturing output, as measured by the amount of manufacturing index (VoPI), grew by 0.9 p.c year-on-year in 2024, easing from the 4.9-percent enlargement in 2023, the Philippine Statistics Authority (PSA) reported on Friday.
READ: Inclement climate dampens native manufacturing unit output
In December, when demand normally spikes resulting in elevated manufacturing, manufacturing unit output grew by a measly 0.2 p.c.
It was nonetheless a reversal from the three.9-percent contraction in November.
Given the modest output progress, information confirmed factories solely utilized 75.5 p.c of their capability on common, barely decrease than the 75.7-percent utilization price within the earlier month.
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John Paolo Rivera, senior analysis fellow at Philippine Institute for Growth Research (PIDS), a state-run assume tank, stated the help from the vacation season was not as robust as anticipated.
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Meals manufacturing
“The numerous slowdown in VoPI displays persistent challenges within the native manufacturing sector, together with weak exterior demand, excessive borrowing prices and lingering provide chain constraints,” Rivera stated.
“The worldwide financial slowdown, notably in main export markets like China and america, could have weighed on the export-oriented manufacturing subsectors,” he added.
Information confirmed the VoPI for completed meals merchandise that got here out of factories contracted at a sooner price of 1.7 p.c in December in comparison with the 0.9-percent decline in November.
What pulled down meals manufacturing within the last month of 2024 was the droop in processing and preserving of fruit and veggies following the onslaught of typhoons late final yr that created provide woes. Manufacture of dairy merchandise and animal feeds additionally took a success.
As it’s, meals was one of many six industries that had posted adverse output progress in December, with manufacturing of fundamental metals (-19.4 p.c) and tobacco merchandise (-18 p.c) registering the biggest declines.
It was the 16 different sectors that had posted constructive progress that introduced the general VoPI again to the constructive territory, figures confirmed. The gainers had been led by producers of digital merchandise (+4.3 p.c), coke and refined petroleum merchandise (+4.4 p.c) and transport tools (+6.1 p.c).
Transferring ahead, Rivera of PIDS believed that the continuing rate-cutting cycle of the Bangko Sentral ng Pilipinas (BSP) would maintain manufacturing unit machines buzzing this yr.
“If the BSP begins slicing rates of interest, borrowing prices for companies may ease, supporting capital funding and manufacturing progress,” he stated.
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“Total, the manufacturing sector is predicted to get well reasonably in 2025, however sustained enchancment will rely on rate of interest cuts, international commerce situations and home demand progress,” he added.
