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Manufacturing poised as new growth driver

Manufacturing poised as new growth driver

According to the National Economic and Development Authority (NEDA), as the IT-BPM sector has attained maturity, the manufacturing sector has now emerged as the next leader in the country’s economic surge.

The manufacturing sector is seen to be positively affected by three factors:

  1. According to NEDA Director General Ernesto Pernia, the newly enacted tax reform law will boost consumer spending and therefore, increase manufacturing demand;

  2. A weaker peso affects the real-effective exchange rate (REER)1, since a lower REER meant that the peso gained external price competitiveness, making manufactured goods in the country more desirable/in demand since they are more affordable;

  3. Low interest rates and buoyant confidence levels should also help to support manufacturing growth for the next few quarters2, with large firms building new manufacturing facilities in the country (e.g., Mitsubishi, Toyota, Gardenia).

With the positive outlook in the manufacturing sector as verified by JobStreet's latest Job Outlook Report and the 24% growth in jobs as reflected in JobStreet job database, the Philippine economy is set for another good year. With the optimistic business climate, all businesses in general are encouraged to bolster operations and deem 2018 to be a great year for expansion.

1 Source: Bangko Sentral ng Pilipinas

2 Source: London-based economic research firm Capital Economics

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