PHILIPPINE factory output likely slackened to post a mere 5.5 percent increase in February, compared with a rapid 34.3 percent growth in January, the economic research arm of Moody’s Investors Service said.
From a year earlier, however, factory output in February likely recovered from negative growth of 2.1 percent, Moody’s Analytics said.
“Philippine industrial production likely expanded 5.5 percent in February, following January’s astronomical 34.3 percent,” Moody’s Analytics said in a weekly outlook, ahead of the release of official data by the Philippine Statistics Authority (PSA) on Tuesday.
The research firm did not, however, address manufacturing value, which expanded 26.5 percent in January, a reversal of a 1.1 percent decline in the same month a year earlier, according to data from the PSA.
Moody’s Analytics pointed out that the Philippines is set to have one of the best performing economies in the region again in 2016.
“Food production is expected to grow strongly in the coming months, as negative effects a severe El Niño had on crop production start to dissipate,” it added.
Manufacturing output as measured by the Volume of Production Index (VoPI) grew 34.3 percent in January from 5.0 percent in December.
The expansion was attributed to robust demand and improvements in eight out of 20 major industries: Chemical products, tobacco products, machinery except electrical, food manufacturing, electrical machinery, beverages, rubber and plastic products, and footwear and wearing apparel.
In a separate report on the VoPI following the release of the January data, the National Economic Development Authority (NEDA) said the manufacturing sector is expected to grow more strongly in 2016, after managing only moderate growth in 2015 due to weak global demand and adverse weather conditions.
The agency said a bullish business outlook is anticipated for the second quarter of 2016 on the back of higher election-related spending activities and the rollout of infrastructure projects.
“Continued implementation of projects under the public-private partnership and stronger domestic demand during the summer season will further support the growth in manufacturing sector,” NEDA said.