MANILA - The glory days of the manufacturing sector, once one of the Philippines’s growth catalysts, appear to be over, at least for now, as slower growth rates were seen in the first two months of the year, the research counterpart of an international credit watcher said.
In its Asia-Pacific preview released on Friday, Moody’s Analytics forecast only a 6-percent growth for the industrial-production sector of the Philippines in March this year.
This means that Moody’s Analytics expects the manufacturing data of the Philippines to rebound only slightly from the previous month’s actual output of 1.2 percent.
The manufacturing output of the country has been growing robustly in double-digit growth rate since July last year. In particular, manufacturing reached the peak of its growth rate in November last year at 25.4 percent. It then slightly dipped in 25.2 percent a month later before sharply slowing down to 5 percent in January this year. The deceleration continued in the second month of the year at 1.2 percent.
The research institution also noted that while the slight rebound in the manufacturing is expected, the lower growth rates in the first two months of 2014 confirmed a lower trajectory for the sector in the next months, as compared to the growth rates seen in the second half of last year.
“Industrial-production growth slowed sharply in January and February, all but confirming that the double-digit increases seen in 2013 have finished. Export demand for goods from the Philippines remains firm, but domestic spending has eased in recent months,” Moody’s Analytics said.
“The government’s infrastructure plans may have lost a little steam,” it added.
The manufacturing data of the Philippines for the month of March is expected to be released next week.
Among the other forecasts that Moody’s Analytics made in the same research note included expectations on the monetary policy, inflation, foreign trade, growth, employment and retail sales in other jurisdictions in the region.
In particular, Moody’s Analytics expects Australia, Indonesia and South Korea to hold their own policy rates in their respective monetary-policy stance meetings this week.
The research arm also expects Taiwan’s and China’s Consumer Price Index data, which will come out next week, to soften as muted pressures were noted during the period.
Foreign trade data of four countries in the region are also scheduled to come out next week. Among the four, Moody’s Analytics expects Australia, Malaysia and Taiwan to post a trade surplus in their latest data sets, while India is still seen to post a trade deficit. Moody’s Analytics also noted that China’s foreign trade has been “downbeat.”