Philippine manufacturing output likely grew by 5.8 percent in June, Moody’s Analytics estimated ahead of the release of official data, steady from the previous month but down from a year earlier.
A 5.8 percent outturn would still be a strong result, the economic research unit of Moody’s Investors Service said, noting that Philippine manufacturers were benefiting from stronger demand at home and abroad.
The Philippine Statistics Authority is expected to release its latest Monthly Integrated Survey of Selected Industries this Thursday, August 10.
The Volume of Production Index (VoPI) grew by 9.8 precent in June last year. The latest data, for May this year, put VoPI growth at 5.8 percent, accelerating from April’s 4.3 percent but lower compared to previous year’s 7.4 percent.
Moody’s Analytics, in research note released over the weekend, said that domestically, private investment and consumption were expanding rapidly as positive demographics and infrastructure improvements were propelling the economy toward growth of about 7 percent.
“Philippine industrial production growth likely held at 5.8 percent year-on-year in June,” it said.
“External demand for Philippine goods, particularly electronics, is improving thanks to the synchronized upswing in global economic conditions,” it added.
Exports earnings climbed to $5.48 billion in May, propelled by growth in electronic products that accounted for 50 percent of the total.
Electronics receipts totalled $2.745 billion, up 17.8 percent from the $2.330 billion registered a year earlier.
Boost from infrastructure
Socioeconomic Planning Secretary Ernesto Pernia had said that construction material production would increase on the back of government infrastructure spending.
Seventy-five flagship projects have been identified by the government as needed to address the country’s huge infrastructure deficit. Out of the 75 projects, 18 valued at P462.74 billion have been approved by the National Economic and Development Authority (NEDA) Board since the Duterte administration assumed office in June 2016.
“Manufacturing output is expected to sustain its growth toward the end of the second quarter, driven by buoyant domestic demand and optimistic business outlook,” Pernia also said.
Pernia added that it was important to streamline efforts across all levels of government to ensure innovation.
“Bureaucratic procedures at the national and local levels should be simplified across the country, from urban centers to far-flung areas. Market-driven research should also be made available to everyone so that firms, whether small or large, can expand production and reach larger markets,” he said.