Weak demand dampens food production
Manufacturing likely grew at a slower pace of 7.2 percent last November, a fraction of last year’s 25.4 percent growth due to weak consumer demand for food products.
Moody’s Analytics in its latest weekly report said that demand cooled in the second half of the year. Last November’s growth of 7.2 percent is the fifth-lowest monthly growth posted in the past year and lower than the October average of 7.5 percent.
The services and other sectors will have to make up for the slower growth in manufacturing for the economy to meet its growth target for the year.
The Philippine Statistics Authority (PSA) is expected to release the official November
manufacturing output data next week.
The latest Moody’s Analytics forecast is part of its Asia Pacific Preview report, which provides a summary of major economic data on the region due out this week. This unit of Moody’s provides expertise in economic and consumer credit analysis, credit research and risk measurement, enterprise risk management and structured analytics and valuation.
“Industrial production likely cooled a little in November from October’s 7.5 percent
year-on-year expansion,” the unit of Moody’s Corp. said.
Philippine manufacturing output rebounded in October from a sluggish performance in September, but still lagged far behind the robust pace of production a year earlier.
The Volume of Production index (VoPI) rose 7.5 percent year-on-year in October, gaining speed from the revised growth rate of 4.8 percent for the preceding month.
The analytics firm had originally estimated the October manufacturing expansion at 5 percent.
On the other hand, Moody’s Analytics pointed out that bad weather associated with typhoon season will affect food supplies and production through December.
However, Moody’s Analytics’ believes improved global technology demand will lift electronics production in 2015, providing support for Philippine manufacturing.
As of October 2014, electronic products remained as the country’s top export with total receipts of $2.226 billion, accounting for 43.0 percent of the total exports revenue during the month.