MANILA, Philippines — The country’s manufacturing sector improved in May, expanding at a faster pace from the previous month amid stronger demand conditions.
In a report yesterday, S&P Global Market Intelligence said the Philippines Manufacturing Purchasing Managers’ Index (PMI) went up to 52.2 in May from 51.4 percent in April.
The latest reading marked the manufacturing sector’s 16th consecutive month of expansion.
A PMI reading above 50 indicates an overall increase from the previous month, while below 50 denotes a decline.
Generated from a survey of around 400 manufacturers, the PMI takes into account the following: new orders, output, employment, suppliers’ delivery times, and stocks of purchases.
“The upturn was supported by a solid rise in both output and factory orders, with firms also expanding their workforce numbers for the first time in four months,” S&P Global Market Intelligence economist Maryam Baluch said.
S&P Global attributed the increase in new orders to stronger demand conditions and acquisition of new clients.
Demand from foreign markets also fared well, with export volumes growing, although at a slightly softer pace than April.
Baluch said vendor performance improved in May for the first time in almost four years, while improved logistics routes helped shorten delivery times.
“Moreover, while the latest data did signal a re-intensification of price pressures in May, rates of inflation were weaker than their historical averages,” she said.
Headline inflation in the country eased to 6.6 percent in April from 7.6 percent in March due to the slower increases in food, transport and utility costs.
“In terms of future output, firms remain largely upbeat, though confidence did take a slight hit and dipped to an 11-month low,” Baluch said.
Around 41 percent of manufacturing firms expect output to expand in the next 12 months with new projects and stronger demand to drive growth.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email, the economic reopening in China, which is among the biggest trading partners and export markets of the Philippines, would be a positive factor for the manufacturing sector in the coming months.
“Further easing of the year-on-year inflation and in global or local interest rates later this year and into next year would also support some pick up in manufacturing activities for the coming months, on top of the further reopening of the Philippine economy towards greater normalcy with no more large scale lockdowns since 2022 and no more COVID restrictions as a policy priority, going forward,” he said.