Philippines expects manufacturing sector to expand by 4.8% in 2005

Manila Philippines - Oct. 28, 2005

Philippines manufacturing sector is seen to grow by at least 4.8 percent in 2005, propping the government's gross domestic growth (GDP) target of at least 5.3 percent for the same year, according to the National Economic and Development Authority (NEDA).

Socioeconomic Planning Secretary and NEDA Director General Augusto B. Santos said value of production index (VaPI) significantly improved in August by 20.4 percent while volume of production index (VoPI) jumped to 7.3 percent from the preceding month's revised year-on-year growth of 0.6 percent.

"The value of net sales registered a robust double-digit increase of 13.9 percent in August compared to July's growth of 6.6 percent," he said.

He also noted that volume of net sales grew 3.8 percent in August 2005, reversing the decline of 3.5 percent in the same period last year. "The indicators signal a continuing recovery of manufacturing sector in the third quarter."

"Despite the slowdown in the electronics sector, total manufacturing output managed to perform well on account of upbeat domestic demand," he pointed out.

The NEDA chief also said substantial gains in the manufacturing sector came from the domestic as well as export-oriented industries.

Santos noted the hefty output increases in chemical products (27.0%), furniture and fixtures (21.9%), textiles (19.3%), fabricated metal products (18.9%), petroleum products (18.6%), food manufacturing (12.0%), nonmetallic mineral products (10.9%), footwear and wearing apparel (10.9%0 and tobacco (10.9%).

Moreover, VaPI continues to maintain its double-digit growth as it rose 20.4 percent. Petroleum products (56.6%) led all the sectors, followed by chemical products (36.2%), furniture and fixtures (25.2%), textiles (22.0%), non-metallic mineral products (20.1%), tobacco (19.4%), food manufacturing (16.3%), fabricated metal products (15.4%) and miscellaneous manufactures (12.1%).

The chief economic planner also said that capacity utilization improved to 80.3 percent. "Average capacity utilization as of August 2005 improved to 80.3 percent compared to 79.4 percent registered for the same period last year."

Subsectors operating above 80 percent capacity comprising 47.8 percent of the total establishment surveyed include: machinery excluding electrical (86.5%), petroleum products (84.2%), paper and paper products (84.0%), electrical machinery (83.7%), leather products (83.3%), rubber products (82.4%), basic metals (82.4%), chemical products (81.7%), food (81.2%), textiles (80.3%), and miscellaneous manufactures (83.2%).

(PNA)

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