Gov't infra program to boost manufacturing sector
February 02, 2021 - Tuesday 3:02 PM by PNAFile photo
MANILA – The government’s 2021 infrastructure program is expected to partly boost Philippines’ manufacturing sector this year and help address the contraction in domestic growth and economic activities because of the pandemic.
In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the infrastructure program, aimed to be around PHP1 trillion annually from 2016-2022, is expected to support the expansion to 52.5 of the Markit Manufacturing Purchasing Managers Index (PMI).
Citing government data, he said the rise in the PMI last December is “a pleasant surprise” and is the highest in more than two years or since December 2018.
He said this development transpired even amid the movement restrictions to address the rise of coronavirus disease 2019 (Covid-19) infections.
“(This is) a leading indicator that could suggest further pick-up in business/economic activities even after the Christmas season in December 2020,” he added.
The uptick in the PMI last December is better than the 49.2 last November.
An index below 50 indicates contraction while figures 50 and above shows growth.
“For the coming months of 2021, increased infrastructure spending, as part of the priorities of the economic recovery program, would benefit contractors and manufacturing industries that are part of the supply chain/value chain,” Ricafort said.
The government’s infrastructure spending is also expected to boost economic activities, especially in rural areas, “given (the) high multiplier effects on real estate/property and in many other related/allied industries,” he said.
Its impact is likewise seen to boost the other expected growth drivers this year that include the continued re-opening of the domestic economy, eventual availability of Covid-19 vaccines, and the impact of monetary easing last year. Joann Villanueva
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