The industrial production growth of the country declined annually in 2024 in 2024 in the midst of geopolitical tensions that dragged the demand, the Philippine Statistics Authority (PSA) reported Friday.
Provisional data from the last monthly integrated research by the selected industries investigated that the factory production, as measured by the volume of the production index (VOPI), last year on average reduced by 0.9%, which delayed from the 4, 9% growth in 2023.
This was the lowest growth on an annual basis in four years or since the sharp contraction of 40.5% during the coronavirus pandemia in 2020.
In December, Vopi stood up with 0.2% year after year and finished three consecutive months.
It reversed the revised fall of 3.9% in November. However, it was slower than the 3% registered in December 2023.
On a seasonal basic monthly basis, industrial production rose by 4% in December, a change of the fall of 1.9% in November.
For comparison: the S&P Global’s Philippines Manufacturing Purchasing Managers’ Index (PMI) climbed to 54.3 in December from 53.8 in November. The fastest in the country has been lecture in November 2017 since the 54.8 lecture.
A PMI lecture below 50 marks a contraction in the production sector, while a print above 50 marks an extension.
Sergio R. Ortiz-Luis, Jr., honorary chairman of the Philippine Chamber of Commerce and Industry, said in a telephone interview that geopolitical tensions may have caused a decrease in production orders.
“There are many orders that have been lost [last] Years and that is why I think geopolitics has influenced this because we have lost a lot of trade. We have lost many visitors, many investments from China, ”said Mr. Ortiz-Luis Jr., who is also as president of the Philippine Exportters Confederation, Inc., said.
He also added that China moved to do business with other Southeast Asian countries.
“Although we are slowly increasing, we are left behind by our neighbors who receive most of the orders and investments from China,” he said.
“I hope that geopolitics can improve, I think they should and reduce tensions. There is a decrease in our electronics [exports]What should have been strong, but should become weak, “he added.
John Paolo R. Rivera, Senior Research Fellow at the Philippine Institute for Development Studies, said in a Viber -Boodschap that suggests ‘softer’ industrial and export activity last year.
“This is in line with broader economic headwind, including stricter financial circumstances and a weaker global question. It could indicate hesitation at companies to expand capacity as a result of uncertainty in demand, high interest rates or increased operating costs, “said Mr Rivera.
He added that export production was struggling, which can reflect the “weak” worldwide question from China and the US.
In the meantime, Mr Rivera said that the slight increase was due to various factors in December, such as improvements in logistics and availability of raw materials, policy support for the production sector, potential decrease in global oil prices and the lighting of inflatoir pressure.
However, he attributes slower growth to a weak external demand, higher loan costs and weak investments in the private sector.
The PSA attributed the slight increase in December factory exit growth to the production of computer, electronic and optical products that rose 4.3% compared to a decrease in transport equipment (6.1% of -0.2%).
The average capacity use percentage in December reached 75.5% in December, somewhat decreases of 75.7% in November.
Nineteen of the 22 industrial divisions booked the average capacity use percentages of at least 70%.
“The prospects of the production sector for 2025 will depend on the increase in monetary policy, recovery in the world trade of large economies such as the US, China and Asean … and increased infrastructure expenditure, industrial stimuli and investment -friendly policy,” Mr Rivera said.
“If inflation stabilizes and energy costs remain manageable, the production costs can relieve, to support growth,” he added.
The Bangko Sentral NG Pilipinas (BSP) started its relaxation cycle in August last year and reduced the most important interest rates with a total of 75 basic points towards the end of 2024.
The BSP expects inflation to establish this year at 3.3%, within the goal of 2-4%. – Kenneth H. Hernandez