MANILA – The manufacturing sector’s output recovered in March 2015 as both production volume and value bounced back and recorded significant growth during the period, according to the National Economic and Development Authority (NEDA).

Registering significant gains for the first time in 2015, the Volume of Production Index (VoPI) posted a double-digit year-on-year growth at 13.6 percent, while the Value of Production (VaPI) recovered from its negative position with a 7.4 percent in the same period.

“This growth is fueled by the strong production performance by the majority of the sub-sectors led by the double-digit growth of tobacco, basic metals and petroleum,” said Economic Planning Secretary Arsenio M. Balisacan.

“This rebound in March suggests a promising first quarter manufacturing performance. The Philippine business sector maintains expectations of favorable performance in the near term and growth drivers in the past year are expected to perform positively in the next period,” he added.

For consumer goods, production value of tobacco and beverages continued to be vigorous all through the first quarter, which is attributed to the implementation of uniform excise tax on local and foreign cigarettes.

For intermediate goods, production values in all except for wood products expanded year-on-year, driven by petroleum, chemicals, and textile. Petroleum posted a 60-percent growth in production value and a 95.9-percent growth in production volume.

For capital goods, growth in basic metals and transport production, particularly in non-ferrous metals, iron and steel was able offset the performance of fabricated metal products and machinery including electrical.

“The growth in transport is mainly due to the government’s re-fleeting program which amplified the demand from the public utility sector,” said Balisacan, who is also NEDA Director General.

Moreover, growth in chemicals, leather products, tobacco manufactures and chemical products boosted the Value of Net Sales (VaNSI) in March 2015, offsetting the performance of printing, beverages and petroleum products.

Meanwhile, the average capacity utilization rose in March 2015 to 83.5 percent, higher than the first quarter average in the previous year of 83.1 percent and the overall 2014 average of 83.4 percent.

“The rise in average utilization levels this month may be a result of increased activity in manufacturing and construction,” the Cabinet official said.

Overall, bright prospects are seen on the back of this first quarter recovery in manufacturing.

“Robust private consumption fueled by continued inflow of remittances will thrive in the current low inflation environment. The low global oil prices sustaining low inflation as well as Philippine business optimism will drive businesses to capitalize on low cost of production,” said Balisacan.

Nonetheless, he said that the government will continue to pursue efforts to improve the investment climate to attract business expansion as well as new investments in the manufacturing sector.

He added that the pursuit and full implementation of government efforts to resolve supply chain gaps and integrate sectors through the Comprehensive National Industrial Strategy will contribute to the realization of the potential of manufacturing.

“Diversification of products and market is vital to maintain our presence globally amidst the low demand from the country’s major trading partners,” said Balisacan.