INDUSTRIAL production likely grew 5.3 percent in January, stronger than a 4.9-percent expansion in December, bucking the slowing demand from China, Moody’s Analytics, a division of Moody’s Corp., said in a report over the weekend.
Moody’s expects industrial production to have sustained the recovery seen in recent months.
“Philippine industrial production is expected to have expanded 5.3 percent year-on-year in January… Since the Philippines is less reliant on China as an export destination than most other countries in the region, its producers have been less affected by slowing Chinese demand,” Moody’s said.
Moody’s said food producers would “start to see improvements in the coming months as the unfavorable growing conditions caused by El Niño start to dissipate.”
The manufacturing sector expanded in December 2015 due mainly to the more robust construction activities, coupled with declining oil prices.
The volume of production index in December rose 4.9 percent from 4.4 percent in the previous month, while the value of production decreased 2.6 percent.
Beverages jumped 12 percent in volume of production from its negative performance in the previous month and 15.2-percent growth in value of production—tripling its performance from November 2015.
The drop in the food subsector, meanwhile, slowed down in both production volume and value, registering a contraction of 1.3 and 2.7 percent, respectively. This is due to the persistent dry spell brought about by El Niño in the second semester of 2015.
For intermediate goods, non-metallic mineral products led a double-digit boom by 18.8 and 18.2 percent in volume and value of production, while paper and paper products came in second, posting 18.6 and 18.8 percent growth in volume and production.
However, petroleum continued to decline, posting a drop of 33.8 and 40.6 percent in volume and value of production due to the weak global demand and oversupply in the world market.
For capital goods, machinery, except electrical machinery, posted a double-digit growth of 17.8 percent and 22.2 percent in volume and value of production. The transport sector expanded 13 and 9.9 percent in volume and value of production following the attractive financing schemes for automotive sales.
The average capacity utilization of firms maintained a growth at 83.5 percent, with basic metals posting the highest utilization rate of 88.5 percent.
Economic Planning Secretary Emmanuel Esguerra earlier said a sustained support for the manufacturing sector would make it realize its full potential. He said it could be done through creating and strengthening linkages across all production sectors.
He said the government must continue to improve infrastructure to support business activity and encourage businesses to reap the benefits of free trade agreements through aggressive information-sharing schemes and simplified bureaucratic processes.