Factories churn out 11% more output in October

MANILA, Philippines - Factory output booked a faster double-digit growth in October amid the boost from electronics production and continued recovery of the agriculture sector, a unit of Moody’s Corp. said over the weekend.

Moody’s Analytics said the expansion of the Philippine industrial production accelerated to 11 percent in October after growing by 9.9 percent in September on the back of a stronger-than-expected gross domestic product (GDP) growth in the third quarter.

 “Food production will grow solidly as the negative effects of 2015’s El Niño climate pattern fade. Higher external demand will boost electronics production,” Moody’s Analytics said. 

The country’s GDP growth accelerated to 7.1 percent in the third quarter of the year from seven percent in the second quarter bringing the average expansion to seven percent in the nine months to September.

Economic managers penned a GDP growth target of between six and seven percent in the back of the Duterte administration’s plan to ramp up infrastructure spending.

Latest data from the Philippine Statistics Authority (PSA) showed factory output, as measured by the Volume of Production Index (VoPI), grew 9.9 percent in September from three percent in the same month last year.

Major sectors that largely contributed to the expansion in VoPI were basic metals (41 percent), machinery except electrical (35 percent), rubber and plastic products (30.5 percent), transport equipment (22.3 percent), petroleum products (21.6 percent), printing (15 percent) as well as wood and wood products (14.8 percent).

Production value, as measured by the Value of Production Index (VaPI), made a turnaround, growing 5.4 percent in September, a complete reversal of the 5.4 percent contraction a year ago.

Seven major sectors significantly contributed to the growth including basic metals (32.8 percent), rubber and plastic products (28.3 percent), transport equipment (21.3 percent), printing (14.7 percent), machinery except electrical (12.7 percent), wood and wood products (12.7 percent) and food manufacturing (10.7 percent).

Earlier, Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) director general Ernesto Pernia said the manufacturing sector’s performance during the period reflects sustained domestic demand.