Budget nod key to manufacturing growth

Increased spending in infrastructure development is crucial in achieving the government’s disbursement target, said the NEDA. #2020budget #buildbuildbuild

Lifting the country’s manufacturing sector requires the timely passage of the 2020 budget and the extension of 2019 budget’s validity, the National Economic and Development Authority (NEDA) said on Thursday.

“The extension in the validity of the 2019 national budget and the timely passage of the 2020 General Appropriations Act (GAA) are needed to sustain the implementation of construction-related activities and help drive growth in the manufacturing sector,” NEDA said.

NEDA Undersecretary Adoracion Navarro said that although volume and value indices for the sector showed contraction for 10 consecutive months, business and consumer outlook remain optimistic.

“Despite manufacturing’s performance, business and consumer outlook remains positive with the anticipation of higher consumer spending during the holiday season, a much favorable macroeconomic condition and a likely recovery in government spending on infrastructure,” Navarro said.

“The extension in the validity of the 2019 budget is important not just for the construction of infrastructure projects but also for critical pre-feasibility, feasibility and other project development studies,” she added.

Earlier, the Philippine Statistics Authority (PSA) reported a decline in the total manufacturing index for the month of October this year.

“Based on the preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI), the Value of Production Index (VaPI) fell by 4.3 percent in October 2019. During the same month of the previous year, the VaPI increased by 4.1 percent,” the PSA said.

“Likewise, the Volume of Production Index declined by 3.7 percent in October 2019. During the same period of the previous year, its annual growth rate was 2.9 percent,” it added.

Moreover, the NEDA executive noted that increased spending in the implementation of the infrastructure development programs as well as the sustained investment on human capital for the remaining months of the year is crucial in achieving the government’s disbursement target.

“We are glad that the Department of Public Works and Highways and other infrastructure-focused agencies, the Department of Education and the Department of Social Welfare and Development have signified commitment to accelerate their respective disbursements for the rest of the year,” Navarro said.