After growing above 9.5% three quarters in a row, Philippine manufacturing jumped to higher gear to reach 12.3% growth, making it the fastest growing industry in the Philippines during the fourth quarter of 2013. Manufacturing extended it’s lead over services through the past four quarters pushing 2013’s full year growth of manufacturing to 10.5%, nearly double the 2012 growth of 5.4%. It was also the fastest quarterly growth for manufacturing in the last three years. For a full report of NSCB on manufacturing go to their site.
To put it into perspective, the graph below shows the size of manufacturing industry vis-a-vis the other industries in the last two years, showing that manufacturing continues to be the largest industry in the Philippine economy.
Government supports manufacturing
NEDA Secretary Baliscan said that sustaining the growth of the manufacturing sector was crucial in achieving inclusive economic growth since it can provide jobs to semi-skilled workers and those without a college degree; supporting the manufacturing sector was one of the highlights of the updated medium-term Philippine Development Plan (PDP); the manufacturing sector was expected to grow some more this year on the back of improving business sentiment; and with help from the manufacturing sector, the Philippine economy is targeted to grow anywhere between 6.5 and 7.5 percent this year.
Trade Secretary Gregory L. Domingo said.“Manufacturing is growing by 10 percent and we expect that it will maintain that pace for another year or two,”
Trade Undersecretary Adrian Cristobal noted that the manufacturing sector currently accounts for just 20 to 23-percent of the country’s total economic output. “We want to bring it higher, to 30-to 34-percent of GDP (gross domestic product), similar to our neighbors.”
I’m personally excited about these high growth rates. It’s provides momentum, but we maybe disappointed if the numbers this year maybe not be as high given the elevated base numbers of 2013. Furthermore more, growth continue to be narrow, majority came from one sector which is the chemical and chemical sector. Semi-conductor and electronic continue to see weakness in the short term. The remarkable growth of wood manufactures is actually driven by the growth of a hand-full of export firms. We’d like to see sectors like food, garments, furniture take root this year given our growing competitiveness.
Drivers for sustained industrial growth are aligning. Government understands industry a little better. Industry is gaining confidence, we have a more competitive peso, smugglers and tax evaders are being chased. We look forward to the long awaited Industry development council to strengthen the coordination across the various industries in our pursuit of industrialization.
Here’s to a strong 2014.