Moody’s Analytics expects manufacturing production in the country to sustain its double-digit pace of growth in October, citing an increase in investments and rising demand.
In a report on Asia Pacific, Moody’s Analytics said it projected manufacturing output to have expanded by 15 percent in October from that of a year ago. Given the growth rate, the average rise in the volume of manufacturing output in the first 10 months of the year could settle at 11 percent—faster than the 7.1 percent reported in the same period last year.
“The sustained rise in both local and foreign investments suggests that growth rates were sustained in October,” the international think tank said in its report.
The National Statistics Office earlier reported that the volume of manufacturing production grew by 16.3 percent in September, faster than the 9.8 percent rise in the same month last year.
Growth was driven by chemical products, furniture and fixtures, leather, tobacco products, basic metals, wood and wood products, publishing and printing, and rubber and plastic products.
The improvement in the country’s business sentiment, which encouraged higher investments in the industrial sector, led to the faster rise in manufacturing output.
For the first time, the Philippines secured an investment grade rating from major international credit agencies.
In March, Fitch Ratings upgraded the country’s credit standing by a notch to the minimum investment grade. Standard & Poor’s and Moody’s Investors Service followed suit in May and October, respectively.
The credit watchdogs cited the country’s improving fiscal standing, rising foreign exchange reserves, robust economic growth and benign inflation.
The recent rise in manufacturing output was a welcome development, according to economists.
They said the industrial sector would need to sustain a rapid pace of growth if the country hoped to see a significant reduction in poverty incidence.
The poverty rate in the Philippines stood at 25.2 percent in 2012. Although it was an improvement from the 26.3 percent reported in 2009, the incidence of poverty in the country is still one of the highest in Asia.