The manufacturing sector likely sustained its growth in March, Moody’s Analytics, a division of Moody’s Corp., said in a report over the weekend.
“Philippine industrial production is forecast to have grown 5.1 percent year-on-year in March following February’s 8.4-percent increase. The main driver of the strong growth in 2016 has been the revival in food manufacturing,” Moody’s said.
“This will continue in the coming months with crop yields recovering as the effects from a severe El Niño climate pattern dissipate,” it said.
The 8.4-percent volume of production index growth in February was a turnaround from the 2.1-percent decline a year ago. The improvement was driven mainly by increased production of furniture, food products and rubber, according to the National Economic and Development Authority.
The value of production index recorded a modest growth of 2.8 percent, rebounding from the 7.6-decline recorded in the same period last year.
Economic Planning Secretary Emmanuel Esguerra said earlier the manufacturing sector was expected to sustain growth this year because of the country’s strong macroeconomic fundamentals, resilient domestic consumption and upcoming national elections.
“There is a positive business outlook due to anticipated increases in gross revenues and net income of some of the country’s largest corporations,” Esguerra said.
Data showed furniture and fixtures recorded strong growth in February on the back of robust domestic demand, posting an increase in volume of 32.4 percent and value of 13.2 percent.
The food subsector also sustained double-digit growth with 26 percent in terms of volume and 25.8 percent in terms of value.
Rubber and plastic products posted a double-digit growth of 25.6 percent in volume and 1.5 percent in value of production. For capital goods, electric machinery grew by 16.3 and 8.3 percent in volume and value, respectively.
Esguerra also said that with low global oil prices, lower production costs would encourage expansion of manufacturing production.
He said that driven by strong consumer spending and efficient distribution of goods, the growth in food production was expected to continue in the coming months as El Niño dry spell was anticipated to fade away in the second quarter of 2016.
Esguerra also said strategic investments in research and development should be pursued. The development of new products and services and the improvement of existing ones will enhance the competitiveness of local players in the global market, he said.