The country’s manufacturing sector likely recovered slightly in March on the back of strong consumer demand, Moody’s Analytics said this week.
In a note to clients, Moody’s Analytics said Philippine industrial production, a leading indicator for the exports sector, may have grown by 5.2 percent in March.
The latest Monthly Integrated Survey of Selected Industries showed the manufacturing sector’s output measured using the volume of production index (VoPI) rose by 4.4 percent in February. This was slower than the 6-percent expansion recorded the month before.
“Domestic demand is going strong and should lift food manufacturing—the largest component of the industrial production survey,” Moody’s Analytics said in a note.
Moody’s Analytics, a think tank, is an affiliate of Moody’s Investor Service, one of the world’s three major credit rating agencies.
“Chemical and petroleum production is struggling in year-on-year terms with the slump in oil prices, but has probably reached a trough with global prices finding a floor,” the firm said.
Data for March industrial production will be released next Tuesday.
Of the 20 main products the country’s factories produce, eight posted declines in February. These were food, rubber and plastic products, petroleum products, footwear and wearing apparel, furniture and fixtures, transport equipment, miscellaneous manufactures, and fabricated metal products.
The slowdown in the manufacturing sector also reflects the decline in the country’s exports for the same month.
Philippine merchandise exports recorded a 3.1-percent decline in February 2015 due to lower sales in agro-based products, manufactures, and petroleum products, according to the National Economic and Development Authority (Neda).
The Philippine Statistics Authority (PSA) earlier said total revenue from exports reached $4.5 billion in February 2015—down from the $4.7 billion reported in the same period last year.
“Majority of the major economies in East and Southeast Asia registered negative export performance in February 2015, with only China in the positive territory,” the Neda said. “This partly mirrors the still fragile global economy, which is particularly reflected in the country’s weak turnout of merchandise exports on the back of lower demand from the country’s major trade partners, Japan and China.”