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Economy

Factory output down for 9th straight month in Nov.

By Beatrice M. Laforga, Reporter

THE country’s manufacturing output extended its losing streak for the ninth consecutive month in November, the statistics agency reported on Tuesday.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries (MISSI) showed factory output, as measured by the Volume of Production Index (VoPI), further declined at an annual rate of 10.8% in November, from the revised -9.3% in October and -7.6% in the same month of 2019.

November saw the steepest drop in four months or since the revised -13.6% in July 2020.

VoPI has been on a decline since March, when the government began imposing stringent lockdown measures to curb the spread of the coronavirus disease 2019 (COVID-19).

In the first 11 months of 2020, factory output shrank by 11.5% on average, against the 8.5% average drop in the same period in 2019.

The PSA attributed the sustained slide in November to the double-digit slump in the indices of 16 industry groups, led by petroleum products (-61.9%), tobacco (-58.6%) and printing (-51.5%).

Meanwhile, the Value of Production Index (VaPI), a similar composite indicator in the survey, slipped by 13.8% year on year from the revised -12.3% in October. This marked the ninth straight month VaPI recorded an annual contraction rate and the fastest since July’s revised 16.8% drop.

Year to date, VaPI fell by 15.3% on average, against the 6.9% drop in the comparable 11-month period in 2019.

The average capacity utilization — the extent to which industry resources are used in producing goods — slipped to 70.9% in November, from 71.8% in October. Only six out of the 20 sectors saw their capacity usage rates reach at least 80%, led by machinery except electrical (91.7%), electrical machinery (85.4%), and furniture and fixtures (84.4%).

In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the latest data highlighted how the coronavirus pandemic dampened consumption.

“This may be a good confirmation that consumption demand really took a big hit with COVID-19 still around and that the usual seasonal uptick may have also been clearly affected by the pandemic,” he said.

“If December numbers confirm a change in trend with more easing of restrictions and controls in the economy, it would be easier to confirm if things are actually getting better. However, at this point, it is difficult to determine the trend even with seemingly more vehicles and people moving around in recent months,” he added.

Factory activity in the country, as measured by a survey conducted by the IHS Markit, continued to deteriorate in December as shown in the manufacturing Purchasing Managers’ Index (PMI) falling to 49.2 from 49.9 in November.

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