Mfg sector seen to lead industry growth

MANILA, Philippines -  The manufacturing sector is expected to lead industry growth in the second half of the year, bolstered by rosier outlook for exports and the increasing interest of foreign investors in the country.

“The sector is expected to gain from the positive outlook for exports and the increasing interest of foreign firms to set up operations in the country,” Socioeconomic Planning Secretary Arsenio Balisacan said during the release of the second-quarter growth figures.

Balisacan said the manufacturing sector remains upbeat as indicated by the strong 10.8 percent growth in the second quarter of the year, buoyed by strong external demand and household consumption.

Balisacan said that apart from the manufacturing sector, the public construction subsector is projected to boost industry growth in the second semester of the year.

“Growth of the construction industry will be supported by the roll-out of public infrastructure projects, including PPP (public-private partnership) projects, the reconstruction assistance in the Visayas region, and the demand for more business and residential units,” he said.

He added the services sector will continue to grow due mainly to higher demand by households, domestic industries, inbound tourists and the strong external demand for business process management.

Meanwhile, Balisacan said that on the supply-side, the agriculture, fishery and forestry sector is seen to also maintain its momentum.

“In particular, livestock and poultry will likely grow due to increasing consumer demand as the holiday season approaches,” he added.

The economy expanded by 6.4 percent in the second quarter from the previous quarter’s 5.6 percent growth, making the Philippines the second fastest growing economy among major Asian countries for the period.

“This higher growth rate, coming from a high base a year ago shows that the economy is back on the higher trajectory of growth registered in 2012 and 2013 and bodes well for economic growth for the rest of 2014,” Balisacan, also the NEDA director general, said.

He was optimistic about the prospects of the country achieving the full-year growth target of 6.5 to 7.5 percent.

On the supply-side, most sectors posted strong growth in the second quarter, except for the construction sector. Agriculture grew by 3.6 percent, industry by 7.8 percent and services by six percent.

Balisacan attributed the decline in public construction to lower spending in infrastructure and other capital outlays particularly in the months of April and May, as major government agencies posted lower-than-programmed disbursements.