MANILA – Manufacturing growth will likely recover in the third quarter of the year after a slight slowdown in the second quarter, an economist said on Monday.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort told the Philippine News Agency (PNA) in an interview that manufacturing and other production activities are expected to pick up in the third quarter of 2023 due to the seasonal increase in the importation, manufacturing and other production activities.
The country’s manufacturing sector grew in June but at a slower pace than the recorded expansion in May.
The Philippine Statistics Authority earlier reported that the Volume of Production Index went up by 3.4 percent from 7.7 percent in May.
The growth of the Value of Production Index also eased to 3.9 percent in June from 9.9 percent in the previous month.
Ricafort said the pick up in the third quarter is “in preparation for the seasonal increase, if not, the peak in demand and sales, for both the local and export market, during the Christmas season, a consistent pattern seen for many years and decades.”
“The preparations for the new school year would also help increase business and other economic activities in the local economy, including some boost in manufacturing and other production activities,” he said.
“The lifting of the Covid state of national public health emergency since July 22, 2023 after more than three years would also help reopen the economy towards greater normalcy, in terms of increased local and foreign tourism, among others, thereby a source of growth for services and manufacturing activities,” he added.
However, Ricafort said these may still be offset by increases in prices, especially higher rice and fuel prices, damage caused by typhoon Egay in the latter part of July, and higher interest rates that weigh on investments, including those for manufacturing. (PNA)