MANILA, Aug. 10 -- The manufacturing sector is expected to sustain growth in the second quarter after it grew by an average of 10 percent in the first half due to sustained domestic and improved external demand, according to the National Economic and Development Authority (NEDA).

“Looking ahead, the outlook for the manufacturing sector remains optimistic on the back of favorable domestic conditions such as stable inflation rate, robust economic demand, increased investments, and business confidence,” said NEDA Director General Ernesto Pernia in a statement.

The sector’s first-half average 10-percent growth was backed by increased production in food manufacturing, basic metals, transport equipment, fabricated metal products, non-metallic mineral products and export-oriented products.

Based on the Monthly Integrated Survey of Selected Industries (MISSI) for June 2017 of the Philippine Statistics Authority, a NEDA-attached agency, the January to June figure was higher than the 9-percent average growth during the same period last year.

For June 2017, the volume of production index (VoPI) and value of production index (VaPI) for manufacturing increased by 8.1 percent and 5.1 percent, respectively, from their June 2016 levels.

It attributed the growth to continuous increase in construction-related and export-oriented products, food manufacturing, transport equipment and petroleum products. 

The increase in production of basic metals, fabricated metal products, and non-metallic mineral products boosted the construction sector.

MISSI is a report that monitors the production, net sales, inventories, and capacity utilization of selected manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.

Meanwhile, Pernia cautioned against possible domestic and external risks to growth, including the planned interest rate hikes of the United States and the inward-looking trade policies of major economies.

“We need to be ready for possible disturbances in business activities during the rainy season,” he said.

The NEDA chief underscored the need to expand production capacity and to encourage entry of new manufacturing firms so as to keep prices low and stable.