The manufacturing sector in the Philippines expanded at a slower pace in May despite improved demand conditions, according to a recent report. The country’s manufacturing purchasing managers’ index (PMI) declined slightly to 51.9 in May from 52.2 in April, but still remained above the neutral 50-mark that separates expansion from contraction.
The PMI data, generated from a survey of around 400 manufacturers, takes into account factors such as new orders, output, employment, suppliers’ delivery times, and stocks of purchases. A statement from S&P Global Market Intelligence economist Maryam Baluch noted that the sector continued to report gains in new orders and output. Demand from foreign markets also increased, with new export orders rising at a faster rate.
Despite these positive developments, firms struggled to maintain their workforce numbers, with job shedding noted for the first time in five months. The rate of decline in the workforce count was the fastest in nine months, largely attributed to employees opting to leave. The data also indicated a drop in input prices as some manufacturers switched to new suppliers, while charges continued to rise, suggesting firms’ intent to build profit margins.
Looking ahead, manufacturers expressed optimism for the next 12 months, with outlook for output improving for the first time in five months and reaching a nine-month high. They are planning to expand operations and introduce new products to capitalize on the improving demand. Baluch suggested that subdued inflationary pressures and a positive demand outlook indicate that economic growth is likely to be sustained in the coming months.
