The growth in the Philippines’ industrial sector likely accelerated in March due to the improving outlook on the country’s investment climate, says Moody’s Analytics.
In a report on Asia-Pacific economies, the think tank said the country’s industrial sector, which is led by manufacturing, likely expanded by 12 percent year-on-year in March from an annual growth rate of 8.7 percent in February.
Should the projection materialize, the average growth of the industrial sector in the first quarter would settle at 12.4 percent.
“Industrial production in the Philippines has been growing at a healthy rate for the past six months as rising investments, both from local and foreign firms, lift output,” the report said.
Over the years, the services sector, which includes business process outsourcing (BPO) firms, has been a main driver of the country’s economic growth.
Economists noted, however, recent improvements in the country’s industrial sector.
The rosy growth projections and stable macroeconomic fundamentals are said to be helping diversify the major contributors to the Philippine economy.
In 2012, the economy grew by 6.6 percent, beating most forecasts.
Of this growth rate, 4.2 percentage points were contributed by the services sector, 2.1 percentage points by the industrial sector, and 0.3 percentage points by the agriculture, forestry, and fisheries (AFF) sector.
The industrial sector’s performance last year was encouraging as its output grew by an annual rate of 6.6 percent, accelerating from only 2.3 percent in 2011.
Economists said favorable fundamentals, such as the government’s declining budget deficit, benign inflation, healthy pace of economic growth, and rising remittances that support household consumption gave businesses the incentive to invest. Michelle V. Remo