Manufacturing still key PH growth driver

MANILA, Philippines – Officials say a “rebalancing” of the key legs of growth in the country is happening.

Services still accounted for half of the country’s gross domestic product (GDP) in the 2nd quarter, but the industry sector, particularly manufacturing, remained strong. Both contributed to the better-than-expected 7.5% growth in the 2nd quarter.

Since 2012, industry has been performing better than it did in the past years, when investors left or snubbed the Philippines for other Asian investment destinations that offered lower energy prices and less restive labor, among others.

According to the National Statistical and Coordination Board (NSCB) data, industry improved grew 10.3% in the 2nd quarter, faster that its 5.85% pace in the same period in 2012. Services’ growth slowed down to 7.4% from 7.7% a year ago.

This marked the 4th consecutive quarter the industries sector outpaced the growth of services.

Socioeconomic Planning Secretary Arsenio Balisacan said at a press briefing on August 29 that he is banking on the revival of the industry sector to create more and higher quality jobs.

“With the rebound of the industry sector, we are optimistic that [there will be] more stable, productive and remunerative jobs, even for the less-skilled, will be generated, which will address persistent unemployment and underemployment and will lead to better quality of life,” Balisacan said.

Agriculture remained the top job provider. Saddled by weather and other issues, it contracted by 0.3% in the 2nd quarter.

Manufacturing and construction

Two industries contributed to industry’s growth the most: manufacturing and construction.

Manufacturing jumped 10.3% from 4.3% a year ago. Construction posted an impressive 17.4% growth from 11.6% the previous year.

“Construction, not durable equipment, is now part of the outlook for sustaining the industry momentum,” according to Balisacan.

Construction grew 15.6%, up from 10.2% a year ago. Durable equipment’s growth slowed to 5.7% from 8.4% a year ago.

Manufacturing’s positive trend was mainly driven by the further expansion of chemical and chemical products, which posted a whopping 82.5% growth. This sub-sector grew only by 10.8% in the same quarter in 2012.

Other manufacturing contributors included:
Food manufacturers – up 6.3% from 5.7% a year ago
Radio, television and communication equipment and apparatus – up 12.7% from 10.5% decline
Furniture and fixtures – up 54.2% from 83.5%
Basic metal industries – up 116.3% from a 40% slump

These show investors’ renewed confidence in the country as a site for job-generating factories and other operations, Balisacan said. – with reports from Cecilia Cabiao/Rappler.com