Philippines manufacturing PMI rises to 50.9 in June as confidence slips

It extended recovery for a second consecutive month.

Manufacturing activity in the Philippines continued its gradual recovery in June, with output and new orders both rising for a second consecutive month, even as business confidence slumped to its weakest level in five months, the latest S&P Global Philippines Manufacturing Purchasing Managers’ Index has shown.

The headline PMI inched up to 50.9 in June, from 50.8 in May, staying above the 50.0 no-change mark for a second straight month and pointing to a modest but sustained improvement in operating conditions across the country’s goods-producing sector.

New orders and output, the survey’s two principal sub-indices, both extended their growth streaks, although the pace of expansion diverged. Demand for Filipino manufactured goods picked up slightly, supported by firmer underlying demand and the securing of new clients, while production growth lost some steam, with factories reporting only a marginal rise in output.

Export orders, which have been in decline for some time, contracted but at a markedly softer rate in June, easing the drag on total new business.

Procurement activity picked up for the first time in four months, as manufacturers modestly increased their intake of raw materials and semi-finished goods, helping firms broadly hold input stocks steady. Supply chains also showed further signs of steadying, with vendor lead times lengthening at the slowest rate since December 2025.

Employment was unchanged in June, marking a turnaround from the job losses recorded in April and May. Backlogs of work rose for the first time in three months, a development linked to stronger order inflows, which analysts suggested could pave the way for renewed hiring in the months ahead.

Price pressures, meanwhile, eased. Input cost inflation slowed to its weakest pace in the current four-month run of rising expenses, with the increase — driven chiefly by higher raw material prices — historically modest. Charges levied by manufacturers also rose more slowly, at a rate just below the survey’s long-run average.

Sentiment sours despite steadier data

Business confidence, however, told a different story, falling sharply to a five-month low. The decline was attributed to the cumulative effect of cost rises over preceding months, which had squeezed margins and dampened the outlook for output growth over the coming year. Firms that remained upbeat pointed to hopes of stronger demand, new product launches, heightened marketing activity, and expansion into new markets.

Maryam Baluch, economist at S&P Global Market Intelligence, said output and new orders expanded further during the month, with broader PMI gauges signalling renewed purchasing activity and a stabilised employment picture. She noted this represented a departure from the job losses seen earlier in the second quarter, adding that the fresh build-up in backlogs pointed to renewed pressure on capacity and the possibility of future recruitment.

She cautioned, though, that steep cost increases recorded over the two preceding survey periods had continued to weigh on sentiment, noting that confidence fell markedly in June even as the sector gained traction.