Philippine manufacturing output may have picked up in September, the economic research arm of Moody’s said, but only due to a base effect as global demand remains weak.
Ahead of next week’s release of official factory data, Moody’s Analytics forecast a 3.9 rise for the month, up from August’s 3.7 percent but a slowdown from the 4.7 percent recorded a year earlier.
“The Philippines’ industrial production likely improved in September from August’s 3.7 percent year-on-year gain thanks to a lower base effect,” Moody’s Analytics said in a weekly outlook.
The research unit of debt watcher Moody’s Investors Service stressed that food production remained weighed down by dry conditions associated with the El Niño weather phenomenon.
Export-oriented industries such as electronics, meanwhile, are under pressure from weak global demand, especially from China.
Manufacturing output as measured by the Volume of Production index grew by 3.7 percent in August after it fell by a revised 0.3 percent in July. A year earlier, growth was a stronger 5.7 percent.
The rise in August was traced to vigorous construction activity and high demand for automotive products, the National Economic and Development Authority (NEDA) said.
The NEDA expects growth in manufacturing to continue in the fourth quarter given a boost from the coming holiday season, spending for the 2016 elections, and the expansion of the business process outsourcing industry.