Overall Performance in Year 2000

• Manufacturing Output Up in 2000

Manufacturing output for the whole year 2000 increased by 14.0 percent in volume and 23.4 percent growth in value. The growth in volume exceeded the 3.5 percent growth in 1999 and the growth in the value of production also surpassed the 8.6 percent growth the previous year.

Paper & paper products had the highest year-on-year growth among the sectors registering a 43.2 percent increase in its VoPI.

Other sectors with double-digit growth in 2000 were electrical machinery (32.4%), miscellaneous manufactures (29.1%), furniture & fixtures (19.3%), and wearing apparel (17.4%).

These positive developments were however affected by weakness in other sectors, like textile products (-23.1%), basic metals (-15.0%), wood & wood products (-4.7%), food manufacturing (-4.2%), rubber products (-3.9%), beverage (-1.7%), chemicals (-1.6%) and non-metallic mineral products (-0.9%).

December 2000 Performance

• Manufacturing Output Still Up But Slower

Manufacturing production in December 2000 increased by 18.5 percent in value and 8.6 percent in volume compared to a year ago according to the preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI). However, these were slower compared to the year-on-year growth rates posted in November 2000 and December 1999.

Moreover, the sector continued to decline month-on-month in December for the second straight month.

Petroleum refineries, electrical machinery, basic metals, and paper & paper products led the growth in volume and value of production. The growth in the output in these sectors could be attributed mainly to the increased demand in the local and/or export markets. Strong export demand for electrical machinery which came with the increase in production workers and expansion of product lines contributed to its positive performance. Basic metals reported the abundance of raw materials for the production of gold and silver and expansion of plant capacity leading to the increase in their output.

• Slower Rise for Net Sales

Net sales in December 2000 rose by 20.5 percent in value and 7.9 percent in volume. The increase in the value of net sales was slower than the 27.5 percent growth posted in November 2000 while volume of net sales growth was also slower than the 15.8 percent growth.

Wearing apparel topped in net sales volume recording an increase of 57.0 percent while petroleum products led in terms of value, expanding by 35.3 percent.

Compared to production, the growth in the volume of net sales was a little lower by 0.7 percentage point. This gap between production and net sales was significantly narrower than the 24.6 percentage-point gap in November 2000, indicating an end to the inventory build-up seen from September to November last year. 

• Producer Prices Pick Up

The producer price index (PPI) increased by 9.2 percent to 155.5 in December 2000 from 142.4 in December 1999. The year-on-year increase in December 2000 PPI was an acceleration from the year-on-year increases of 8.3 percent in November 2000 and 7.9 percent in December 1999.

The gain in the overall PPI was due to the rising prices of petroleum products (43.3%), glass & glass products (29.9%), textile (24.9%), fabricated metals (25.3%), printing & publishing (20.5%) and electrical machinery (14.7%).

Increases in the producer prices could be attributed to higher cost of production inputs particularly of crude oil and other imported inputs aggravated by the weakening of peso, and increased labor cost.

• Average Capacity Utilization at 80.0%

Average capacity utilization rate for December 2000 for manufacturing was estimated at 80.0 percent, higher than the 79.5 percent posted in November 2000 and the 79.3 percent posted in December 1999. Nine out 16 sectors improved its rate of use of capacity as compared to December 1999. Electrical machinery had the highest capacity utilization rate of 92.0 percent while transport equipment posted the lowest capacity utilization rate of 70.5 percent.

• Value of Production

In December 2000, the value of production index (VaPI) of 660.3 increased by 18.5 percent from 557.0 in December 1999. Year-on year increases were observed in 10 out of 16 major sectors led by petroleum refineries, which increased by 66.1 percent (See Annex 1-A). Other sectors contributing double-digit growths to the value of production were electrical machinery (49.5%), basic metals (27.5%), paper & paper products (47.3%), non-metallic minerals (26.6%), wearing apparel (13.1%), wood & wood products (13.3%), and furniture & fixtures (14.5%).

On the other hand, sectors that had declines in their value of production were food manufacturing (-13.5%), transport equipment (-37.5%), chemicals (-15.8%), rubber products (-22.7%), textile (-1.1%) and tobacco (-4.9%).

• Volume of Production

The volume of production index (VoPI) for total manufacturing increased by 8.6 percent to 165.4 from 152.3 in December 1999. Nine out of 16 sectors posted year-on-year increases led by electrical machinery with a 30.4 percent increase. (See Annex 1-B). Other sectors which exhibited double-digit increases were petroleum refineries (15.9%), basic metals (29.6%), paper & paper products (47.6%), wood and wood products (13.3%), non-metallic minerals (12.8%), and furniture & fixtures (14.5%). The increases in the production output of these sectors can be attributed mainly to the increased demand for the products in both domestic and export markets. The increase in production workers and expansion of their product lines contributed in the improved performance of electrical machinery. The abundance of raw materials for gold and silver production and expansion of production plant resulted in the increase of basic metal products.

On the other hand, sectors which dipped were food manufacturing (-16.0%), transport equipment (-39.0%), chemicals (-18.2%), textile (-20.8%), rubber products (-22.6%), beverage (-5.2%) and tobacco (-3.9%). Slowdowns in the production in these sectors could be attributed either to lack of raw materials, reduction of manpower, labor disputes, machinery breakdowns or decrease in the demand which resulted to partial or temporary shutdowns in the operations of some establishments.

• Value of Net Sales

The value of net sales for December 2000 rose by 20.5 percent over the same month in 1999. The value of net sales in twelve out of 16 major sectors exhibited growth. The leading sector was petroleum refineries posting a 35.3 percent growth (See Annex 2-A). Other sectors that recorded double-digit year-on-year increases in their value of net sales were wearing apparel (67.0%), electrical machinery (26.0%), basic metals (37.7%), textile (22.1%), paper and paper products (20.5%), non-metallic minerals (21.8%), and wood & wood products (17.1%).

Sectors that had a negative performance in its value of net sales as compared to the same month in 1999 were transport equipment (-27.1%), rubber products (-28.9%), miscellaneous manufactures (-25.4%), and furniture and fixtures (-6.6%).

• Volume of Net Sales

The volume of net sales for December 2000 increased by 7.9 percent over the same month in 1999. Increases were observed in 9 out of 16 sectors led by wearing apparel which rose by 57.0 percent (See Annex 2-B). Other sectors with double-digit growth were basic metals (44.3%), paper and paper products (20.7%), non-metallic minerals (21.9%), and wood and wood products (17.1%).

On the other hand, double-digit decreases were observed in transport equipment (-28.9%), rubber products (-28.9%), and miscellaneous manufactures (-20.0%).

• Capacity Utilization

About 25.4 percent of responding establishments operated at full capacity (90%-100%) compared to 17.5 percent in December 1999. Almost half or 42.6 percent of the respondents utilized at least 80 percent of their capacity. In the same period last year, only 39.2 percent operated at this level. Those operating below 70 percent capacity utilization accounted for 37.5 percent. However, this proportion was lower compared to 41.3 percent a year ago.

The December 2000 average capacity utilization rate for manufacturing was estimated at 80.0 percent, which was higher compared to the 79.3 percent recorded over the same month in 1999 (See Annex 3B). Of the 16 sectors, nine sectors posted higher capacity utilization rates as compared to a year ago. Electrical machinery recorded the highest average capacity utilization rate at 92.0 percent. Other sectors with more than 80 percent capacity utilization rates were furniture and fixtures (91.2%), paper and paper products (87.2%), petroleum refineries (86.4%), wearing apparel (84.9%), miscellaneous manufactures (84.2%), and wood and wood products (80.2%).

• Response Rate

These results were based on the response of 404 sample establishments, which comprised 77.7 percent of the total number of establishments covered by the survey.

ANNEX 1-A

VALUE OF PRODUCTION INDEX (DECEMBER 2000)

Note: Sectors are ranked according to their contribution to the overall December 2000 growth rate.

r - revised due to updating of data from late responding establishments.

ANNEX 1-B

VOLUME OF PRODUCTION INDEX (DECEMBER 2000)

Note: Sectors are ranked according to their contribution to the overall December 2000 growth rate.

r - revised due to updating of data from late responding establishments.

ANNEX 2-A

NET SALES VALUE (DECEMBER 2000)

Note: Sectors are ranked according to their contribution to the overall December 2000 growth rate.

ANNEX 2-B

NET SALES VOLUME (DECEMBER 2000)

Note: Sectors are ranked according to their contribution to the overall December 2000 growth rate.

ANNEX 3-A

Distribution of Key Enterprise by Capacity Utilization
(In percent)

r - revised due to updating of data from late responding establishments

r - revised due to updating of data from late responding establishments

r - revised due to updating of data from late responding establishments

Source: National Statistics Office
Manila, Philippines