Manufacturing output likely picked up in May from the previous month, on improving demand for Philippineproducts, Moody’s Analytics, a division of Moody’s Corp., said in a report over the weekend.
“The Philippines’ industrial production is expected to grow 7.8 percent year-on-year in May after rising 5.9 percent in April. The archipelago’s manufacturers are receiving a boost from improved global demand, which is supporting the export-oriented electronics industry,” Moody’s said.
Moody’s said aside from sustained strong demand abroad, another reason for the continuous expansion of industrial production was the robust domestic demand.
“Both private investment and consumption are rising rapidly, thanks to favorable demographics and ample investment opportunities that will leave the Philippines as one of the fastest-growing economies globally for the foreseeable future,” it said.
The government expects the economy to expand between 6.5 percent and 7.5 percent this year, anchored mainly on robust domestic demand, higher fiscal spending and investments.
First-quarter growth settled at 6.4 percent, slower than 6.8 percent a year ago, weighed down by sluggish public spending. Despite the slower first-quarter GDP growth, it remained one of the fastest in the region. The economy grew 6.9 percent in 2016.
The National Economic and Development Authority earlier said the outlook for the manufacturing output remained positive despite the slower growth in April.
The Philippine Statistics Authority said the volume of production index for manufacturing grew 5.9 percent in April 2017, lower than the 12.8 percent in the previous month and the 10.1 percent in April 2016.
“Despite the slowdown at the onset of the second quarter, manufacturing output is expected to sustain its growth following anticipated increases in demand during the harvest season and the enrollment period in schools,” Socioeconomic Planning Secretary Ernesto Pernia said in a statement.
The growth in manufacturing output in April was attributed to the sustained production of petroleum products, transport equipment and basic metals posting double-digit increases.
Petroleum products posted a 51.7-percent increase in production due to higher demand for gasoline from Vietnam, Japan, Saudi Arabia, Malaysia and Indonesia.
The double-digit growth in the production of basic metals at 28.5 percent drove the sustained growth in construction-related manufactures.
Pernia said the government’s “Build Build Build” infrastructure program was anticipated to further increase construction activities in the country which would provide additional boost to the manufacturing sector.