Philippine manufacturing output likely moderated in November 2016 from October as food production suffered from bad weather, the economic research arm of Moody’s Investors Service said over the weekend.
Moody’s Analytics estimates growth in November manufacturing output slowed to 8 percent from a rise of 8.4 percent in October, but accelerated from a 4.4 percent increase in November 2015.
The Philippine Statistics Authority (PSA) is scheduled to release the November output data on Tuesday, January 10.
Food production likely took a hit from Supertyphoon Lawin, Moody’s Analytics said.
The typhoon battered Ilocos, Cagayan Valley, Central Luzon and Cordillera regions, with the damage to agriculture estimated at P10.2 billion. The Department of Agriculture noted 467,068 hectares of agricultural land were damaged and the production loss was estimated at 244,224 metric tons.
“Despite this, the overall outlook for Philippine manufacturing remains positive,” Moody’s Analytics said, noting that external demand would boost electronics output and rapid growth in domestic demand would support production in general.
Last October, the manufacturing sector grew 8.4 percent as measured by the Volume of Production index, compared with 1.5 percent in October 2015 and 9.2 percent in September 2016. To support the manufacturing sector, government efforts to improve the business climate must be sustained, the National Economic and Development Authority (NEDA) said at the time.
Focusing on industries with potential to generate employment and encourage entrepreneurship, the sector is expected to benefit from the industrial strategy of the Department of Trade and Industry, Socioeconomic Planning Secretary Ernesto Pernia has said.
“With the Duterte administration’s commitment to fast-track implementation of infrastructure projects and programs, construction-related manufactures will be a major contributor to growth of the sector,” he said.
Better infrastructure tends to stimulate expansion in the manufacturing sector by providing the producers with easy access and connectivity to the value chain that leads to local and international markets, according to the Cabinet official.
“To raise the local industries’ competitiveness in the increasingly integrated global economy, we need to increase both public and private investments in R&D. This will surely help in the exploration and development of new products, processes and markets,” he added.