Manufacturing growth in December likely slowed to 1.5 percent due mainly to lower production of food products owing to the prolonged dry spell brought about by El Niño, according to the research arm of Moody’s Corp.
In a report last week, Moody’s Analytics said the gain in Philippine industrial production in the last month of 2015 was likely lower than the 7.5-percent increase posted in November. The government will release the December manufacturing and exports data on Tuesday.
“Food manufacturing will continue to be a drag on output due to dry conditions affecting crop output,” Moody’s Analytics explained.
External developments were also seen to have had affected export production in December.
“Export-oriented manufacturing is expected to be dented by the slowing Chinese economy. This will be offset somewhat by a rise in demand from the US as its recovery continues,” Moody’s Analytics said.
The latest government data showed that the country’s export revenue slid for the eighth-straight month last November, dropping by 1.1 percent year-on-year to $5.1 billion, bringing the 11-month total down by 5.8 percent to almost $54 billion. The government had conceded that 2015 ended with a decline in exports.
The National Economic and Development Authority (Neda) said it was expecting the manufacturing sector to have further grown in December on the back of robust domestic demand during the Christmas holiday season, sustained strong remittance inflows from Filipinos overseas, stable inflation, and cheap oil. Ben O. de Vera