Philippines: Manufacturing PMI falls but remains in expansionary terrain in June
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 51.3 in June from 51.9 in May. As a result, the index remained above the 50.0 no-change threshold but signaled a softer improvement in manufacturing-sector operating conditions compared to the previous month.
The key driver of the decline was a notable slowdown in new orders growth—including from abroad—suggesting weakening underlying demand. Additionally, employment deteriorated for a second straight month, reflecting spare operating capacity in the sector. This weaker demand, in turn, contributed to firms reducing their backlogs at a speedier pace. More positively, June saw the strongest rise in production in six months.
Regarding prices, June saw a renewed rise in input costs—the strongest since February—but the rate of increase remained below the historical average. This rise in input prices led manufacturing companies to hike their charges, albeit at a relatively modest pace that was softer than in previous months. Despite these cost pressures, manufacturers maintained a positive outlook for production over the coming year, buoyed by hopes of improved demand conditions. However, the level of optimism dimmed from May, indicating weaker-than-average business sentiment.