MANUFACTURING output in May is likely to have increased 9 percent in May this year, the economic research arm of Moody’s Investors Services estimates in its latest weekly outlook.
That is a significant leap from the 1.1 percent decline reported in May last year.
While the Philippine Statistics Authority (PSA) is expected to release the May figures this week, Moody noted that manufacturing in the country has been expanding rapidly this year due to strong performance of the domestic economy, driven particularly by the food manufacturing sector. Agricultural production recovering from the negative impact of the 2015 El Niño climate pattern has indeed helped food manufacturing industry.
Production in April this year had risen 10.5 percent year-on-year; but measured by the Volume of Production index (VoPI), the significant jump in April is traced to election-related activities.
The PSA had, however, pointed out that 13 out of 20 top industries also helped lift VoPI. Among those 13, six major sectors recorded double-digit growth. They were: machinery except electrical (43.9 percent), miscellaneous manufactures (40.7 percent), printing (33.5 percent), food manufacturing (27.1 percent), transport equipment (23.5 percent) and basic metals(18.8 percent).
The National Economic and Development Authority (NEDA) expects a bullish business outlook for the second quarter.
Higher production volume is anticipated across manufacturing sub-sectors because of the typical increase in demand during summer season and enrollment periods, it said.
The agency added that the stable inflation and interest rates, and sustained foreign investment flows would further support the favorable outlook for the manufacturing sector. Nonetheless, NEDA also warned of risks to production growth due to possible occurrence of La Niña by the end of the year and the potential recovery of oil prices.