The decline in Philippine manufacturing may have eased, with output in June likely down by just 1.2 percent given an improvement in oil-related production, Moody’s Analytics said in its latest weekly outlook.
“Philippine industrial production likely improved in June, after falling 3.1 percent year-on-year in May,” the economic research arm of Moody’s Investors Service said.
Comparative output from June last year was up 12.7 percent year-on-year.
“Government stimulus will also lift domestic-facing food production through the second half of 2015,” Moody’s Analytics added.
The Philippine Statistics Authority (PSA) is expected to release the preliminary June manufacturing output data this week.
In May this year, manufacturing growth, as measured by the Volume of Production index (VOPi), dropped 3.1 percent after it rose less than 0.1 percent (revised) in April and surged 12.7 percent in May 2014.
The fall in May growth was traced to the decline in footwear and wearing apparel, wood and wood products, basic metals, food manufacturing, and beverages.
The National Economic and Development Authority (NEDA) has said the low inflation environment, lower oil prices, continued inflow of remittances, expected strong demand from government expenditures, and brisk business activity likely to take place when the election season starts, will all help improve the sector’s performance in the coming months.
In addition, the agency pointed out that efforts to pursue higher-value products and processes and new markets must be encouraged to maintain competitiveness and compensate for the fragile export performance of the manufacturing sector.
Small and medium enterprises should also be enabled to participate in the global value chain and maximize the benefits of free trade while minimizing vulnerabilities from an uncertain global demand.
The NEDA added that the anticipated integration of the Association of Southeast Asian Nations markets presents opportunities for the manufacturing sector in the near term.