The Philippine manufacturing sector continued to post solid growth, even as it recorded the softest improvement in its operating conditions in three months, according to a report released yesterday.
Though printing above the historical trend and expanding the current growth run to 13 consecutive months, the S&P Global Philippines manufacturing purchasing managers’ index (PMI) slipped from January’s seven-month high of 53.5 to 52.7 in February, according to S&P Global.
The report said overall growth in the manufacturing sector was supported by strong, albeit slightly slower, expansions in output and new orders.
It added that as per anecdotal evidence, greater demand from customers and a growing clientele helped drive the latest upturns.
“According to the latest PMI data, growth across the Filipino manufacturing sector remained solid midway through the first quarter of 2023, albeit easing slightly from January. Both production levels and factory orders rose at solid rates and were stronger than their respective historical averages,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
“However, with production requirements increasing at a softer pace in February, employment fell slightly for the first time in three months. Moreover, ongoing supply chain concerns continued to remain a drag on the sector,” she added.
Baluch said supplier performance worsened further, and to a greater extent, as material scarcity, port congestion and difficult transportation conditions resulted in a further lengthening of average lead times.
“Moreover, higher prices at suppliers directly fed into cost burdens, causing input price inflation to rise at a rapid and accelerated pace,” Baluch said.
“Despite the ongoing supply-side challenges and an uncertain international climate, the Filipino manufacturing sector has remained resilient, benefitting greatly from domestic demand. Firms hope that the buoyancy in the market is maintained as we progress further into the year,” she added. – Angela Celis
