Factory output growth in Philippines slows sharply in 2023

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The country's manufacturing output expanded at a slower pace in 2023 as food, beverages and 12 other industry divisions registered declines, according to the Philippine Statistics Authority (PSA).

Preliminary results of the PSA's Monthly Integrated Survey of Selected Industries showed the average growth rate of the Volume of Production Index (VoPI) for manufacturing slowed sharply to 4.4 percent in 2023 from 15.1 percent in 2022.

The average VoPI of the food products industry division contracted by 1.8 percent in 2023 after expanding by five percent in 2022.

Likewise, beverages registered a 7.8-percent decline from a 6.9-percent increase.

Other industries that posted contractions include tobacco products; wearing apparel; leather and related products; wood, bamboo, cane, rattan articles and related products; paper and paper products; chemical and chemical products; rubber and plastic products; other non-metallic mineral products; fabricated metal products except machinery and equipment; computer, electronic and optical products; machinery and equipment except electrical, and furniture.

The data released by PSA also showed the Value of Production Index (VaPI) for manufacturing exhibited slower growth of 5.9 percent in 2023 from 22.5 percent in 2022.

A slower growth rate in VaPI was likewise observed in the food products industry division at 1.2 percent from 14.1 percent.

Last December, the VoPI for manufacturing grew by two percent, faster than the 1.8 percent in November 2023, but lower than the 4.5 percent in December 2022.

'The expansion in the annual growth of the VoPI in December 2023 was mainly brought about by the slower annual decline in the manufacture of food products at 1.4 percent in December 2023 compared with its annual drop of 4.9 percent in the previous month,' the PSA said.

The VaPI grew at a faster rate of 2.6 percent in December 2023 from two percent in November 2023 but slower than the 10.1 percent in December 2022.

'The expansion in the annual growth of the VaPI in December 2023 was mainly attributed to the slower annual decrease in the manufacture of food products at 0.8 percent in December 2023 from its annual drop of 3.7 percent in the previous month,' the PSA said.

The average capacity utilization rate for manufacturing was reported at 74.3 percent in December 2023, slightly lower than the previous month's 74.8 percent.

The PSA said 27.4 percent of total responding establishments operated at full capacity or 90 to 100 percent in December.

'The top three industry divisions in terms of reported capacity utilization rate were manufacture of rubber and plastic products (80 percent), manufacture of machinery and equipment except electrical (79.8 percent) and manufacture of beverages (79.6 percent),' the PSA said.