Essay On Manufacturing Industry In The Philippines

Over the next 20 years, manufacturing will be the fastest growing sector of the Philippine economy.

Projections made by Oxford Economics and Deloitte see growth of manufacturing as a sector of the economy of 5.5 percent per year from 2013 to 2033.

That growth rate means manufacturing will outpace what is currently the fastest growing sector of the economy—business process outsourcing (BPO). BPO is now a $15 billion year business employing a million workers.

From 2009 to 2013, manufacturing expanded by an average growth rate of 7.9 percent in value added terms, according to Deloitte.

Manufacturing includes food, which is about 45 percent of the manufacturing sector; electronics, chemicals, intermediate goods, other consumer goods, textiles, metals, engineering and transport.

Industry grew by just 5.5 percent in the first quarter this year—down from 7.6 percent in the fourth quarter and 11.3 percent in the first quarter of 2013. In other words, year on year, industry growth was halved.

Manufacturing in particular slowed down by a third, from 9.5 percent growth in first quarter 2013 to 6.8 percent in January-March this year.

Economic Planning Secretary Arsenio Balisacan says the decline in the Philippine economy “was expected, given the magnitude of the destruction in production capacity.”

Natural disasters hit the country in the latter part of 2013, particularly the 7.2 magnitude earthquake in Bohol and Cebu and super typhoon Yolanda, the world’s worst disaster, affected not only the areas that were directly hit, but other areas because of the “interconnection of the markets and supply chains.”

“Damage to agricultural output also disrupted supply chains, which may partly explain why food manufacturing output also declined,” Balisacan says.

Despite high and unstable power cost, lack of infra, natural disasters and other challenges, manufacturing will