Connect with us

Hi, what are you looking for?


Factory slump continues for 8th straight month as output falls in October

By Marissa Mae M. Ramos, Researcher

The country’s manufacturing product contracted for the eighth straight month in October, the Philippine Statistics Authority (PSA) reported on Friday.

Preliminary results of the PSA’s Monthly Integrated Survey of Selected Industries (MISSI) showed factory output, as measured by the Volume of Production Index (VoPI), declined by 11.3% year on year in October.

The latest result is faster than the revised 8.6% drop in September and the 5% contraction recorded in October last year. It also marked the steepest decline since the 13.4% drop in July.

Factory output has been falling since March, when parts of the country were placed under a strict lockdown due to the coronavirus pandemic.

Year to date, factory output shrank by 11.9% on average versus the 8.5% slump recorded in 2019’s comparable 10 months.

The PSA attributed the faster decline in October to reductions in the indices of 15 industry groups. Twelve industry groups saw double-digit drops, led by petroleum products (-99.1%), printing (-53.4%), and tobacco products (-48.7%).

A similar composite indicator in the PSA’s MISSI, the value of production index (VaPI) likewise slid by 14.2%, deeper than the 12.4% recorded in the previous month. It also posted its eighth straight month in contraction and was the largest since the 16.7% fall in July.

Average capacity utilization — the extent to which industry resources are used in the production of goods — averaged 67.2% from 69.2% the previous month. Only seven of the 20 sectors registered capacity utilization rates of at least 80%.

In an e-mail, University of Asia and the Pacific Economist Victor A. Abola said the continued decline could still be attributed to the extended lockdowns imposed by the government to contain the pandemic.

“[T]he weakness of the economy may be seen in the slower print (2.9%) for heavy-weighted food manufacturing compared to September (4.7%). The larger drop in printing at -53.4% in October from -34.1% a month earlier reflects the ‘austerity measures’ of firms and consumers for the Christmas season,” Mr. Abola said.

The economist also saw that the closure of refineries had a “big negative impact” on industrial output.

The VoPI and VaPI for petroleum products both declined by around 99% with average capacity utilization rate at 0.14% for October. It has since settled at this level since July following a capacity utilization rate of 55.04% back in June.

In a phone interview, Federation of Philippines Industries (FPI) Chairman Jesus L. Arranza said manufacturing continues to be on a downturn as lockdown restrictions continue to affect demand and the ability of employees to come to work.

Both Messrs. Arranza and Abola expect manufacturing production to continue its decline for the rest of the year.

Mr. Abola attributed his outlook to continued weakness in demand with export firms to likely perform better as the recovery in large markets such as China and the US “are much stronger” compared to the domestic market.

For Mr. Arranza: “There will not be a bounce-back by the end of the year. It will take some more time, probably by the second quarter of next year depending on the availability of a vaccine.”

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



THE INTERNATIONAL Monetary Fund (IMF) said macroeconomic policy support and reforms may help diminish the pandemic’s scarring effect on the Philippine economy. “Some economic...


The country’s retirement income system is based on a small basic pension and an earnings-related Social Security System. — PHILIPPINE STAR/ MICHAEL VARCAS THE...


Global oil prices have spiked in recent weeks due to lack of supply and strong demand as more countries reopened. — PHILIPPINE STAR/ MICHAEL...


A Filipino uses a mobile phone in Parañaque, Aug. 7, 2018. — REUTERS/ERIK DE CASTRO DIGITAL TRANSFORMATION is estimated to create up to P5...


By Angelica Y. Yang, Reporter SN Aboitiz Power (SNAP) said the global health emergency had pushed back the timeline of its planned Alimit hydropower...


AYALA-LED AC Energy Corp. is moving to fully acquire ownership of renewable energy (RE) platform UPCAC Renewables Australia, after announcing that its management has...

You May Also Like


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...


Pfizer Inc on Wednesday raised its 2021 sales forecast for its COVID-19 vaccine by 29% to $33.5 billion, and said it believes people will...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!