FACTORY OUTPUT SLIPS SLIGHTLY IN JANUARY
MANILA, March 26, 2004 (STAR) By Rica D. Delfinado - Factory performance started this year weakly as output continued to decline for the fifth straight month in January as manufacturers continue to feel the impact of rising costs of raw materials due to the continued weakening of the peso against the dollar coupled with some manufacturers’ decision to adopt a wait and see stance due to political uncertainty.
Analysts also said the global increase in fuel prices and the general weakness in consumer demand are dampening the sector’s overall performance.
Based on the latest survey of the National Statistics Office (NSO), the manufacturing industry’s volume of production index declined by another 0.2 percent, albeit slower compared with the revised three-percent drop in December last year.
In November, an 8.4-percent drop was recorded following a 5.5-percent decline in October. In September, a drop of 3.7 percent was noted.
The government statistics office said that it had monitored sharp declines in key export sectors led by leather products, tobacco, footwear and wearing apparel, wood and wood products, as well as petroleum products.
Earlier, the National Statistics Office (NSO) reported that the country’s trade deficit widened to $336 million in January as exports failed to keep pace with imports.
Analysts said the trade gap, almost double last January’s deficit of $185 million, underscored concerns that the country is slipping behind its neighbors and losing out to Chinese competitors.
Imports went up by nine percent to $3.18 billion in January from $2.918 billion a year ago, while exports stood at $2.844 billion.
Based on the NSO report, the sector which declines weighed down most on manufacturing’s volume of production index was the leather product sector which suffered a 94.8 percent drop in output.
Other top losers in terms of volume of production were: tobacco, down 22.4 percent; footwear and wearing apparel, 19 percent; petroleum products, 15.6 percent; transport equipment, 13.9 percent; and wood and wood products, 13.8 percent.
In terms of value, however, the government statistics office said production output was 4.4 percent higher in January from a year ago, compared with a revised 3.6 percent rise in December.
The strong performance was due mainly to the notable showing of the basic metals, machinery and miscellaneous manufactures sectors.
The NSO said that factories had an average capacity utilization rate of 78 percent in January, down slightly from 78.2 percent in December.
Reported by: Sol Jose Vanzi
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