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Monday, October 23, 2017 | MANILA, PHILIPPINES
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Date posted: Friday, December 11, 2015 | Manila, Philippines


Factories rev up on strong domestic demand

RECORD DEMAND for motor vehicles has provided a boost to the manufacturing sector.

Nowhere is this more evident than in Toyota Motor Philippines Corp. (TMPC), which cornered 45% of the domestic market in 2014 and occupied the 7th rung of this year’s Top 1000 Corporations.

Gross revenue jumped 31.6% to P104.40 billion last year from P79.31 billion in 2013. Net income last year surged 74.1% to P7.03 billion, with the company’s gross profit margin rising to 13.0% from 11.9% the previous year.

TMPC First Vice-President Rommel R. Gutierrez said growth would have been faster if not for last year’s port congestion and Thailand’s political crisis. For instance, Toyota Autoparts Philippines, Inc., one of Toyota group’s parts suppliers, saw its gross revenue drop 14.9% in 2014.

The Toyota group’s mixed performance mirrored what was happening in the Philippines’ overall manufacturing performance, which had been saddled by the congestion of Manila’s main ports, which delayed deliveries and pushed up the cost of raw materials and other products.

Philippine Statistics Authority data showed that the manufacturing sector’s gross value added increased by 8.3% to P1.67 trillion last year. This, however, was slower than the 10.3% increase posted in 2013.

The slowdown also was evident in the volume of production index, growth in which was halved to 7.3% last year from 13.9% the previous year.

Among the fastest-growing subsectors in 2014 were publishing and printing, which grew by 86.1%; fabricated metal products (44.6%); furniture and fixtures (22.9%); beverage industries (24.6%); and machinery and equipment except electrical (24%).

Besides TMPC, another manufacturing corporation that made it to this year’s Top 1000 Corporations was Petron Corp., which shot up to the first spot after growing its revenue by 5.7% to P298.01 billion. Rival Pilipinas Shell Petroleum Corp. was not far behind on 3rd spot after revenue climbed 12.8% to P224.78 billion.

Baguio-based chip manufacturer TI (Philippines), Inc. claimed the 4th place, followed by Nestlé Philippines, Inc.

The slowdown in the manufacturing sector is expected to persist this year. Economic Planning Secretary Arsenio M. Balisacan, who is also director-general of the National Economic and Development Authority, said: “The manufacturing sector continued to contract in terms of volume and value due… to the sustained decrease in global demand and business interruptions during the rainy season.”

Despite this, manufacturing sector growth is seen to get a boost from household consumption, which in turn could get a lift from remittances and election-related spending. “These will then boost domestic demand and support growth in the manufacturing sector,” Mr. Balisacan said.

In the case of auto manufacturing, the government has unveiled its Comprehensive Automotive Resurgence Strategy Program, which is aimed at boosting the competitiveness of the industry and drawing foreign investors that have aspirations of transforming the Philippines into a regional production hub.

*Send e-mail to Christine at cscastaneda@bworldonline.com or follow her on Twitter @cjscastaneda.

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