MANILA, December 31, 2005
 (STAR) By Rica D. Delfinado - Factory output recovered in October, posting a 4.6-percent expansion from a drop of 4.5 percent in September, Socioeconomic Planning Secretary Augusto B. Santos reported yesterday.

Citing figures from the Monthly Integrated Survey of Selected Industries (MISSI) for October, Santos said the manufacturing sector’s volume of production index rose by 4.6 percent from the preceding month’s revised year-on-year decline of 4.5 percent.

In terms of value, the sector’s value of production index (VaPI) continued to expand, rising by 13.9 percent during the review period.

The sector’s volume of net sales likewise improved by 0.5 percent from a 3.3-percent slump the previous month. Despite the slowdown in the electronics sector, total manufacturing output managed to perform well on account of continued strong domestic demand and the positive performance of some export-oriented industries.

Santos, who also heads the National Economic and Development Authority (NEDA), said that both domestic as well as export-oriented industries posted substantial output gains.

Hefty output gains were registered in furniture and fixtures (21.6 percent), petroleum products (15.7 percent), chemical products (12.6 percent), miscellaneous manufactures (11 percent) and food manufacturing (10.6 percent).

The NEDA chief added that output increases were also recorded in textiles (8.8 percent), footwear and wearing apparel (6.7 percent ), electrical machinery (5.1 percent), rubber products (4.2 percent) and paper and paper products (1.2 percent).

"Food manufacturing is expected to continue its strength in the 4th quarter buoyed by the holiday season and consumer spending on priority basic goods such as food, electricity and water," Santos said.

The October MISSI report noted that the trend from the third quarter personal consumption expenditures showed that amid higher prices of goods and the volatile oil prices, personal consumption was strongest in transportation and communication followed by food, tobacco, household operations, and fuel, light and water.

Meanwhile, VaPI continued to maintain its double-digit growth as it rose by 13.9 percent. Petroleum products led all sectors followed by chemical products, furniture and fixtures, miscellaneous manufactures, electrical machinery, food manufacturing, and textiles.

The same MISSI report stated that value of net sales increased to 8.7 percent while volume of net sales recovered to 0.5 percent from a 3.3 percent drop the previous month.

"Increases in the value and the upturn in the volume of net sales are expected to improve the profitability of the manufacturing sector in the fourth quarter buoyed by the holiday season," the chief economic planner said.

He further noted that average capacity utilization in October improved to 80.4 percent from the 80.1 percent registered in the same period last year.

Subsectors operating above 80 percent comprise 47.1 percent of the total establishments surveyed. These include food manufacturing (81.3 percent), paper and paper products (83.3 percent), leather products (82.8 percent), rubber products (82.6 percent), chemical products (81.3 percent), petroleum products (84.6 percent), basic metals (82.4 percent), machinery excluding electrical (86.5 percent), electrical machinery (84.5 percent), and miscellaneous manufactures (83.4 percent)," Santos noted.

The October 2005 MISSI result corresponds to the retrieval of 463 sample establishments’ reports. It has a response rate of 88.9 percent of the total sample of large manufacturing establishments operating in the country. This includes firms within the economic zones under the Philippine Economic Zone Authority (PEZA) and the Bases Conversion Development Authority (BCDA).

Chief News Editor: Sol Jose Vanzi

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