Factory output likely up, says Moody’s
Factory output likely grew by a faster rate in August, bolstered by stronger demand for the country’s exports and fueled by improving economic conditions in advanced economies.
According to Moody’s Analytics, this development may boost hopes that manufacturers’ contribution to domestic growth will be sustained in the third quarter, helping the economy expand in line with the state’s ambitious target for the year.
“Philippine manufacturing continues to grow solidly,” read a report by Moody’s Analytics, the research arm of international debt watcher Moody’s Investor Service.
Moody’s Analytics sees factory output rising by 11 percent in August, better than the 9.6-percent expansion reported in July.
In the second quarter of the year, the local manufacturing sector, a perennial laggard to the services industry, provided a large boost to economic growth, helping the country become Southeast Asia’s best performer.
From April to June, growth was driven by the manufacturing sector, which rose by 7.8 percent. Agriculture rose by 3.6 percent, while services expanded by 6 percent. Overall, Philippine gross domestic product (GDP) rose by 6.4 percent in the three months to June, faster than the first quarter’s 5.6 percent expansion.
“Domestic demand has recovered since last year’s typhoon, and export demand continued to improve through the third quarter,” Moody’s Analytics said. “Solid private sector investment will continue to support production.”
This year, the government expects growth to settle between 6.5 and 7.5 percent—a goal officials are confident can still be met. The International Monetary Fund and the World Bank expect the country to grow below target.
With the first-semester growth seen at 6 percent, the country would have to expand by 6.9 percent in the second half for state targets to be met, according to the Philippine Statistics Authority.
Last year, the economy grew by 7.2 percent, outpacing all of Southeast Asia’s major economies. The country’s growth was also second fastest in the continent, next to China.
The data on the Philippines’ factory output will be released this Thursday.
