MOODY’S ANALYTICS ESTIMATES:

July manufacturing may be down 3.3% on-year

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Philippine manufacturing output may have dropped by a further 3.3 percent in July, extending a decline from recent months as external demand remained weak, according to an estimate by the economic research arm of Moody’s Investors Service.

The Philippine Statistics Authority (PSA) is expected to release the preliminary July manufacturing output data this week.

The estimate by Moody’s Analytics would indicate a slowdown from a 3.6 percent fall in June but a sharp swing to the negative from a 7.6 percent increase a year earlier.

The “Philippines’ industrial production likely continued struggling in annual terms in July after falling by 3.6 percent year-on-year in June,” Moody’s Analytics said in its latest weekly outlook.


“Base effects have exacerbated the slump from low oil prices and weakened global demand stemming from China,” it said.

Petroleum products and basic metals were hardest hit, the research unit of Moody’s said.

Industries such as food production should improve in the coming months as the sector recovers from damage caused by previous typhoons, it added.

In June this year, manufacturing growth as measured by the Volume of Production index (VOPi) declined 3.6 percent after it fell 2 percent (revised) in May. In June last year, output surged 12.7 percent.

The fall in June this year stemmed from the hefty drop in the volume of production in basic metals, according to the PSA data.

The National Economic and Development Authority said persistently weak global demand and business interruptions during the rainy season were behind the poor performance of the country’s manufacturing output in June.

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