Native factories have recorded an uptick in gross sales attributable to “strong” demand for Filipino merchandise. —Photograph from Fb of the MEPZ Employees Affiliation
MANILA, Philippines — Philippine manufacturing unit exercise expanded at a softer tempo for the second straight month in February after the standard increase in demand in the course of the vacation season light, though growing backlogs had triggered a contemporary rise in employment.
A survey of round 400 producers confirmed the Philippines’ Buying Managers’ Index (PMI)—a gauge of the well being of the manufacturing sector— stood at 51 in February, S&P International reported on Monday.
READ: PH factories posted ‘modest’ enchancment in February
Whereas the newest studying settled above the 50-threshold separating growth from decline, the February PMI was down from the 52.3 recorded in January as progress in each output and new orders slowed.
Demand
In a commentary, Maryam Baluch, economist at S&P International Market Intelligence, mentioned the top of the Christmas purchasing season put the brakes on robust manufacturing exercise that was seen on the shut of 2024.
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“Strong progress noticed from the top of the earlier yr into the start of this yr waned in February,” Baluch mentioned.
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Survey information confirmed the growth in new orders—together with demand from abroad markets—was the weakest in seven months in February. That, in flip, weighed on manufacturing, with output progress posting the slowest tempo of improve since July 2024.
Employment up
In response to easing manufacturing exercise, Filipino producers needed to mood their enter shopping for, which grew on the weakest clip in 15 months. Manufacturing prices likewise softened in February, leading to a “fractional” improve in promoting costs.
However regardless of the moderation within the general manufacturing exercise, S&P mentioned demand situations remained comparatively robust, which put stress on capability.
Firms had reported a rise in backlogs of labor for the primary time in 5 months. To satisfy all orders, S&P mentioned native producers had to make use of their inventories, leading to a decline of their enter inventory holdings, a primary in three months.
Corporations additionally needed to broaden their headcount to satisfy the demand. Whereas the rise in hiring was marginal, S&P mentioned the rise in employment snapped two months of flattish staffing numbers.
Transferring ahead, S&P’s Baluch mentioned additional price cuts to the central financial institution’s coverage price may assist help native manufacturing exercise.
“In the meantime, inflationary pressures eased, thus suggesting that the central financial institution will proceed to proceed with a loosening of its financial coverage,” she mentioned.
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“This might in flip increase considerably weakened enterprise confidence and help additional new order progress,” she added. INQ
