Industrial output seen going down
The amount of goods the Philippines produces is expected to decline slightly in July as weak global conditions dampens demand for the country’s exports.
Moody’s Analytics, a think tank, said base effects from last year added to the impact of cheap fuel, which weighed on products that use oil as a raw material.
“The Philippines’ industrial production likely continued struggling in annual terms in July,” the firm said. Moody’s Analytics is an affiliate of international debt watcher Moody’s Investor Service.
The firm said it expected Philippine industrial production, measured in terms of volume, to decline by 3.3 percent year-on-year. This follows June’s 3.6-percent contraction. In terms of value, manufacturing production declined by 7.3 percent compared from the double-digit growth of 10.1 percent in June 2014.
The government’s Monthly Integrated Survey of Selected Industries (MISSI) report next week.
“Base effects have exacerbated the slump from low oil prices and weakened global demand stemming from China,” Moody’s said. “Export-facing petroleum products and basic metals are struggling the most,” it added.
The dip in June’s production levels were led by basic metals, which were down 34.4 percent. Petroleum production was one of the main losers, declining 15.8 percent.
In July this year, the price of oil dipped by nearly a fifth in international markets as major exporters like Saudi Arabia, the US and Russia sustained levels of production. The price of Dubai crude declined to $56.18 per barrel in July, the lowest in four months at the time.
“Domestic-facing industries such as food production should improve in coming months after earlier typhoon damage,” Moody’s said.
The think tank said production drops in certain sectors might be offset by increases in industries that market to locals.
“Domestic-facing industries such as food production should improve in coming months after earlier typhoon damage,” the firm said.
