Factory output grows in March

MANILA, Philippines - A unit of Moody’s Corp. said factory output in the Philippines would continue to book a double-digit growth in March amid improved global economic conditions.

Moody’s Analytics said industrial production growth likely accelerated to 11.4 percent in March from 10.7 percent in February as manufacturing strength has been fairly broad-based among the sub-sectors.

It added food production has also been doing particularly well.

“We look for electronics output to continue to rally in the coming months because of improved external conditions,” it said.

 Moody’s Analytics said another positive factor is the planned increase in infrastructure by the Duterte administration to 7.4 percent of gross domestic product (GDP) by 2022 from the current 5.4 percent of GDP.

 “Even with this, the main driver of production growth will be booming domestic demand as rising incomes and infrastructure projects drive consumption and investment,” it said.

Latest data from the Philippine Statistics Authority showed factory output as measured by the Volume of Production Index (VoPI) for manufacturing grew 10.7 percent while production value as measured by the Value of Production Index (VaPI) expanded at a faster pace of 13.6 percent in February .

For consumer goods, furniture and fixtures posted a double-digit growth of 21.9 percent in volume and 16.6 percent in value of production, while food manufactures grew in volume and value of production by 20.6 and 19.3 percent, respectively.

For intermediate goods, petroleum products registered growth of 47.1 percent in volume and 95 percent in value, reversing the contractions last year.

 Production of wood and wood products rose 19.5 percent and 21.2 percent in volume and value of production, while non-metallic mineral products grew 26.3 percent and 20 percent in volume and value, respectively.

Socioeconomic Planning Secretary Ernesto Pernia said there is a need to strengthen the domestic manufacturing sector to enable it to meet the demand for increased consumption and higher spending on infrastructure.

 “The sector is expected to benefit from an investment-led growth supported by stable inflation, increased spending on infrastructure and rural development, strong private consumption, and continued gains in overseas remittances,” he said.