Lowest since March 2024 as output, new orders moderate
The Philippines’ manufacturing sector stayed on the growth track in February, though recording milder growth as new orders and output moderated, S&P Global said in its latest estimate released on Monday.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index — a composite single-figure indicator of manufacturing performance — inched down for a second straight month to 51 in February from 52.3 in January.
It explained that the underlying data showed a mixed picture, with the sector showing a slight cooldown as growth in new orders and output moderated on the month, leading to a softer increase in purchasing activity.
“Nonetheless, for the first time in three months, employment levels rose, with companies challenged to meet sustained demand improvements, as indicated via a fresh rise in backlogs,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
“Meanwhile, inflationary pressures eased, thus suggesting that the central bank will continue to proceed with a loosening of its monetary policy. This could in turn boost somewhat weakened business confidence and support further new order growth,” Baluch added.
Manufacturers in the Philippines remained optimistic about the outlook for production over the coming 12 months, the report said.
“Firms expressed hope that demand trends would continue to improve, and that the upcoming election would provide an additional boost. However, the degree of confidence weakened to a 10-month low,” it added.
Seasonal slowdown
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, pointed out in an e-mail that while the manufacturing indicator remains in expansion mode for 18 straight months, as it remains above the 50 no-change mark that separates growth from contraction, the February figure is the lowest since March 2024.
“(This) partly (reflects) the seasonal slowdown in demand and production/manufacturing activities upon crossing the new year, after the seasonal increase in demand for many businesses during the Christmas holiday season,” Ricafort said.
“Furthermore, uncertainties on (US President Donald) Trump’s higher US import tariffs and other protectionist policies since his inauguration on January 20, 2025 (is) also a drag on global investments and international trade, including those in the Philippines,” he added.
