MANILA – The Department of Finance on Monday said growth in the manufacturing sector is expected to boost the country’s economy in the second quarter of the year.
Finance Undersecretary and chief economist Gil Beltran said the rise in the country’s manufacturing output in the second quarter may likely raise the gross domestic product (GDP) growth to 7 percent.
Manufacturing grew by 13 percent in the second quarter compared to only 4.3 percent in the first quarter.
The increase was driven mainly by printing, which grew by 163 percent.
“The rise in manufacturing growth from 4.3 percent or 6.8 percent [using the national income accounts] in first quarter to 13 percent in second quarter foreshadows a possible return to 7 percent real growth in second-quarter,” Beltran said in a statement.
“Manufacturing accounts for 23 percent of the economy, implying that the sector added incremental 1.4 percentage to 2 percentage points to real GDP growth in the second-quarter,” he added.
Beltran also noted that production output in the second quarter increased almost three-fold while sales increased 1.5 times in the quarter.
“This means that the sector continued to draw down from inventory as in the first quarter. Replenishment of supply is necessary soon to avoid price increases,” he said.
Beltran warned that the Department of Trade and Industry may need to encourage investments in the manufacturing sector “to forestall inflationary impact as inventories drop below manageable levels.”
In the first half of the year, printing (135.4 percent) posted the highest increase in production followed by furniture and fixtures (67 percent), machinery excluding electrical (52.2 percent), and fabricated metal products (50 percent).
The Philippine economy eased to 5.7 percent in the first quarter, the slowest growth pace in the last nine quarters, due to the lingering effects of typhoon “Yolanda.”