Low employment in the Philippines slows manufacturing activity in May

But optimism hits a 9-month high.

The Philippines' local manufacturing activity slowed in May, with the headline S&P Global Philippines Manufacturing PMI dropping slightly to 51.9 from 52.2 in April.

Despite this, the figure remained above the neutral threshold of 50.0 for the ninth consecutive month.

Maryam Baluch, an economist at S&P Global Market Intelligence, noted that despite growth in production requirements, companies have struggled to maintain employees. Job shedding was noted for the first time since December 2023.

This also marked the fastest rate of job decrease in nine months, attributed by the companies to voluntary leavers.

Despite this, the manufacturing sector continued to experience growth in new orders and output, reflecting positive progress halfway through the second quarter.

Increased business requirements also supported higher purchasing activity and inventories.

Whilst backlogs continued to fall, goods producers remained equipped to handle current tasks. Input prices have also dropped, with some companies citing a switch to new suppliers as the reason for the decrease.

Baluch emphasised that subdued inflationary pressures and a positive demand outlook suggest that economic growth in the Philippines will likely continue in the coming months.

Optimism amongst manufacturers however reached a nine-month high, reflecting positive sentiment in the sector.