THE outlook on industrial production remains positive with the expected boost from the government’s robust capital expenditures, especially on infrastructure, Moody’s Analytics, a division of Moody’s Corp., said in a report over the weekend.
“While industrial production growth has eased through the first half of 2017, the medium-term outlook for the Philippines’ manufacturing sector remains bright. In large part, that reflects a likely pick-up in capital expenditure, which should provide a boost to local manufacturing,” Moody’s said.
“Domestic demand also remains on a solid footing, keeping food production buoyant, the largest component of the industrial production survey,” Moody’s said.
The Duterte administration aims to increase its fiscal expenditures on infrastructure projects under its ambitious “Build, Build, Build” program to further boost the economy, create more jobs and stimulate further economic activities nationwide.
The government aims to build airports, seaports, roads, highways, bridges, railways, and even a subway in Metro Manila to alleviate traffic congestion in the capital region. Finance Secretary Carlos Dominguez III earlier said the “Build, Build, Build” program would create multiplier effects.
Moody’s, however, expects the volume of industrial production in August 2017 to ease to 7.3 percent from 8.1 percent a month ago.
Earlier, the National Economic and Development Authority said average growth of the manufacturing sector in the first six months hit 10 percent, up from the average expansion of 9 percent a year ago.
Economic Planning Secretary Ernesto Pernia said the double-digit expansion in the first half was backed by increased production in food manufacturing, basic metals, transport equipment, fabricated metal products, non-metallic mineral products and export-oriented products.
The growth was mainly driven by the increase in construction-related and export-oriented products, food manufacturing, transport equipment and petroleum
products. The increase in production of basic metals, fabricated metal products, and non-metallic mineral products lifted the construction sector.
Leather products and footwear led the increase in production of export-oriented goods.
Pernia remains optimistic of the manufacturing sector’s outlook, saying growth is expected to be sustained into the second semester.