Philippine manufacturers cautious despite demand rise

July output rose at a historically muted rate.

The Philippines manufacturers are playing it safe despite the improvement in July, an economist from S&P Global Market Intelligence said.

Headline S&P Global Philippines Manufacturing PMI slightly increased to 50.9 in July from 50.7 in June, signalling a modest improvement in the health of local manufacturers and a possible return to growth momentum

“PMI data from the opening month of the third quarter still painted a picture of a muted overall performance. Output and new orders continued to rise, but the pace of expansion remained historically subdued. Purchasing and employment also rose at slower rates, reflecting underlying caution among manufacturers,” Maryam Baluch, Economist at S&P Global Market Intelligence, said.

Baluch noted that inflationary pressures were muted, providing a silver lining to the otherwise cautious landscape. At the same time, optimism regarding future production levels surged to a four-month high, as firms strategically prepared for anticipated demand.

“While challenges remain, growing positive sentiment hints at a more hopeful outlook for the sector,” Baluch said.

Demand for Philippines-manufactured goods improved for a fourth month running in July, spurring a further rise in new order intakes. Foreign sales also contributed to growth in total new work, albeit only to a fractional degree. New export orders increased for the first time in five months.

Nonetheless, the rate of increase for overall new orders softened slightly over the month. The latest uptick was modest and weaker than the long-run series average.