By Cai Ordinario, June 5 2019; Business Mirror

Image Credit to Business Mirror

The agriculture sector was identified by the National Economic and Development Authority (Neda) as the key industry that can help revive the manufacturing sector from its stupor in the coming months.

In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia said efforts are needed to boost the performance of food manufacturing, which is one of the largest manufacturing sectors.

These efforts start with addressing the needs of agribusiness firms such as governance issues that hinder the growth and development of the agribusiness firms and related industries.

“A strong whole-of-government—nay, whole-of-society—approach is needed to accelerate the growth of manufacturing and boost its contribution to industry growth. The needs of the food-processing sector should be addressed as it accounts for the largest share among all manufacturing subsectors. This points to the critical importance of agriculture, which, besides being the source of food, is also the feeder sector to the food manufacturing subsector,” Pernia said.

“The government may need to revisit existing interventions to ensure that they are designed to be responsive to the needs and actual behavior of farmers, fisherfolk and processors,” he said.

Pernia added that the delineation of responsibilities across various food-safety regulatory authorities should be clarified in order to improve the enforcement of regulations. He said there is also a need to encourage businesses to increase production.

“It must be ensured that all food products, both for domestic market consumption and for export, are aligned with Good Agricultural Practices or Good Manufacturing Practices,” said Pernia.

“Transacting with government must be simplified and made less expensive, as mandated by RA  11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, ” he said.

In addition, the law calls for the standardization of requirements for business registrations and permit issuances, and capacity building to improve the efficiency of LGUs in the processing of business applications.

On Tuesday, the Philippine Statistics Authority (PSA) said the country’s manufacturing output contracted 14 percent in April, the lowest since December 2018 when the Volume of Production Index (VoPI) contracted 9.1 percent. In April last year, the VoPI grew 21 percent.

The VoPI for the food manufacturing sector contracted 20.6 percent, one of the five sectors that registered the largest declines in April 2019.

The other sectors were Iron and Steel with a VoPI contraction of 30 percent; Tobacco, 29.2 percent; Leather products, 25.5 percent; and Petroleum products, 24.3 percent.

“Notwithstanding, manufacturing output is expected to recover supported by improved domestic demand in the coming months. Easing inflationary pressures, accelerated government spending on infrastructure, and a more upbeat consumer outlook also provide additional support given expectations of additional income and availability of more jobs,” Pernia said.