PHILIPPINE factory output likely expanded in volume in January, the economic research arm of Moody’s Investors Service said, reducing the impact of a slowing Chinese economy and El Niño on the manufacturing sector.
Moody’s Analytics said that manufacturers produced goods at a faster pace of 5.3 percent in January, compared with 4.9 percent in December last year and 2.6 percent a year earlier.
“Philippine industrial production is expected to have expanded 5.3 percent year-year in January, continuing the acceleration seen in recent months,” Moody’s Analytics said in a weekly outlook, ahead of the official data to be released by the Philippine Statistics Authority (PSA) on Thursday.
The research firm did not, however, address manufacturing value, which declined 2.6 percent in December 2015, a reversal of a 3.2 percent increase in the same month a year earlier, according to data from the PSA.
Moody’s Analytics pointed out that 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
“Food producers will start to see improvements in the coming months as the unfavorable growing conditions caused by El Niño start to dissipate,” it added.
Manufacturing output as measured by the Volume of Production Index (VoPI) grew a 4.9 percent in December from a revised 4.4 percent in November.
The expansion was attributed to robust demand and improvements in nine out of 13 major industries: non-metallic mineral products; paper and paper products; machinery except electrical; leather products; miscellaneous manufactures; transport equipment; electrical machinery; beverages; and chemical products.
In a separate report on the VoPI following the release of the December 2015 data, the National Economic Development Authority said manufacturing had benefited from increased construction activity and low oil prices.
Despite an unfavorable economic global climate, the manufacturing sector remained optimistic given low and stable inflation, good employment opportunities and increased consumer spending power, it added.
“The continued drop in petroleum prices will also keep operating costs minimal and this is expected to boost the volume of production,” it said.