Manufacturing output in the Philippines was estimated to have grown by 7 percent year-on-year in April, reversing the deceleration recorded in February and March, according to the latest outlook report for Asia Pacific of Moody’s Analytics.
In its latest outlook report for Asia Pacific, Moody’s Analytics estimated that manufacturing output in the Philippines had grown by 7 percent year-on-year in April, reversing the deceleration recorded in February and March.
“(The slowdown in February and March) may have reversed in April and … headline growth should have rebounded,” the research unit of Moody’s Corp. said in the report.
The National Statistics Office earlier reported that the volume of production index (VoPI), which measures year-on-year increase/decrease in volume of production by the manufacturing sector, stood at 16.6 percent in January. This, however, slowed to 8.3 percent in February and further to 1.2 percent in March.
Earlier this year, the Philippines’ credit ratings finally reached investment grade. Fitch Ratings upgraded in March its rating for the country by a notch from BB+ to the minimum investment grade of BBB-, while Standard & Poor’s did the same in May.
Government economists said the investment grades were expected to help the country attract more foreign direct investments (FDIs) and catch up with its Southeast Asian neighbors, which cornered substantial shares of the FDIs coming to Asia.
Economists stressed the need for the Philippines to attract more job-generating FDIs as they pointed out that recent robust economic growth had yet to translate to actual poverty reduction.
For the benefits of economic expansion to be felt by the poor, economists said the Philippines should be able to increase the number of jobs available and attract investments, especially in manufacturing.
The Philippine economy for the past decade has been driven by the services sector, which includes the vibrant business process outsourcing (BPO) industry.
Economists, however, said the country needed to boost its manufacturing industry to provide jobs to people from the low-income group. They said the manufacturing industry has a bigger multiplier effects on the economy.
Last year, the Philippine economy grew by 6.6 percent, registering one of the fastest growth rates in Asia. Despite this, poverty incidence remained significant at 27.9 percent as of the end of the first semester of 2012.