Additional manufacturing investments urged as supply capacity nears limits

by Richmond Mercurio (The Philippine Star), May 13, 2018

MANILA, Philippines — The Philippines is in need of fresh investments that would ramp up manufacturing output as current supply capacities are hitting the limits, resulting in export losses in recent months.

“While production base is large, the increased demand on several agri based products like coconut and mango based products, fruits and vegetables are hitting capacity limits,” Trade Secretary Ramon Lopez said.

“Despite being huge producers of electronics and agri and agri-based products like bananas, pineapples, coconut, supply capacities have been hitting the limits and we need more investments to ramp up capacities and jobs,” he added.

While working on export diversification both on products and markets as well as increasing value added for local products, Lopez said the Department of Trade and Industry seeks to build further the production capacities of existing “product winners” the country is known for or those which has clear comparative advantage.

“We are improving the investment climate, infrastructure, logistics and forex policies that will encourage more manufacturing activities. President Duterte’s administration has opened up huge non-traditional markets like China, Russia and Middle East,” Lopez said.

Merchandise exports fell for a second consecutive month in March, contracting by 8.2 percent to $5.5 billion as revenues from sales of manufactured goods and agro-based products declined.

Philippine Exporters Confederation Inc. Sergio Ortiz-Luis Jr. earlier said the decline in merchandise exports can be attributed the lack of sufficient supply caused primarily by exporting firms’ decision to put on hold expansion plans brought about by uncertainties in the labor sector due to the issue of contractualization.

Lopez, for his part, said supply issues limited export capacity due to a fire that gutted a major exporter last year.