WHILE business confidence remained positive overall and the manufacturing purchasing managers’ index (PMI) remained above the 50-level reflecting growth, optimism dipped to the lowest since April 2020, according to Standard and Poor’s Global (S&P).
In a statement, the global intelligence firm disclosed that the country’s manufacturing data indicated a solid improvement for June in operating conditions across manufacturing firms but PMI slipped marginally to 53.8 in June from 54.1 in May.
However, despite a loss in growth momentum for the second month running, operating conditions improved for five successive months with the headline PMI figure signaling solid overall growth in the manufacturing sector.
“The Philippines manufacturing sector continued to note solid growth in June. Production levels rose, driven by a faster increase in new orders,” S&P Global Market Intelligence economist Maryam Baluch noted.
“Moreover, the output and total new orders expanded quicker than in May, thereby continuing the respective sequences of expansion to five months. Production levels increased at the second-fastest pace since November 2018. Anecdotal evidence noted higher customer demand prompted greater output in June, the S&P added,” she added.
In particular, Baluch cited that “production levels rose, driven by a faster increase in new orders.”
“Domestic demand remained strong as the lifting of pandemic restrictions allowed customer activity to pick-up,” she said.
Still, S&P Global Market Intelligence has flagged easing export production since March as it saw “foreign client demand contract(ing) for the fourth-month running and at a sharper pace.” Baluch said.
“Weak international client demand and supply issues reportedly led to diminished volumes of new work from abroad,” the economy expert explained.
Despite this though, she figured that “domestic demand (have) remained strong as lifting pandemic restrictions allowed customer activity to pick up.”
“In terms of prices, both cost burdens and the charges levied by firms rose for the 26th consecutive month and despite easing, input price and output charge inflation rates were among the fastest on record,” she concluded.
