THE Philippines’ manufacturing output likely grew at a faster pace in February compared with January due to seasonal factors but still lagged behind the year-earlier increase, Moody’s Analytics said in a forecast under its latest weekly report.
The economic research arm of Moody’s Investors Service said manufacturing output likely expanded by 4.5 percent in February, picking up pace from a 3.3 percent increase recorded in January but remained behind revised the 6 percent rise posted in February last year.
The Philippine Statistics Authority (PSA) is expected to release the official February manufacturing output data this week.
“February’s Lunar New Year celebrations likely added volatility to the monthly data,” Moody’s Analytics said.
“Looking through the seasonality – chemical and petroleum production has been struggling with the slump in global energy prices, while food production has been a bright spot, helped by buoyant domestic demand,” it added.
In January, manufacturing output as measured by the Volume of Production index (VoPI) posted growth at a slower-than-expected 3.3 percent, against a 6.7 percent expansion seen in December 2014.
The National Economic and Development Authority (NEDA) earlier said indicators pointed to higher manufacturing growth in 2015.
However, the sector needs to enhance its absorptive capacity and address current constraints in order to be able to meet growing demand, the economic planning agency said.
The NEDA underscored the need to fast-track infrastructure development to address logistical bottlenecks particularly in airports, cargo, road networks and mass transport.
Power also needs to be managed well to meet higher demand from the manufacturing sector, particularly those involved in the manufacturing of textiles, plastics, non-metallic mineral products and some electronic products, the agency added.
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.