Manufacturers to help drive growth in 2014

The country’s chief economist said rising investments of companies operating in the Philippines would continue to drive growth in 2014, as it had last year, despite lingering uncertainties in the global front.

Arsenio Balisacan, director general of the National Economic and Development Authority, said favorable business sentiment and the increase in the importation of capital goods should sustain the rise in investments this year.

“We remain optimistic that this trend will continue,” Balisacan said.

Indicators point to a continuing rise in domestic investments throughout 2014, which will help sustain the country’s robust growth regardless of how the global economy fares, he said.

Government economic officials said an encouraging development in 2012 and 2013 was the rising contribution of investments to economic growth.

Previously, growth was largely accounted for by domestic consumption.

The National Statistical Coordination Board (NSCB) earlier reported that investments in fixed capital formation rose by an annual rate of 13.1 percent in the third quarter of 2013, accelerating from 10.5 percent observed in the same period last year.

Key manufacturing industries accounted for the bulk of the investments, resulting in faster growth of their production volume.

Latest government statistical data on the manufacturing sector showed that the volume of production index (VoPI) for selected manufacturing industries rose by 21.3 percent in November from a year ago, registering the fastest pace of increase in about three years.

The key manufacturers were those involved in the production of non-electrical machinery, tobacco products, leather products, basic metals, rubber and plastic products, and beverages.

In 2013, rising investments of companies located in the Philippines helped boost the country’s growth, averaging 7.4 percent in the first three quarters of the year—one of the fastest rising economies in Asia.

Balisacan also cited indicators of improving business confidence in the country.

He mentioned in particular the results of a recent survey by the Bangko Sentral ng Pilipinas showing that the business confidence index improved to +52.3 percent in the fourth quarter of 2013 from +42.8 percent in the third quarter.

The BSP’s survey “indicates an uptick in confidence,” he said.  Michelle V. Remo