Philippine manufacturing growth hits three-month high in September

Published October 03, 2022 01:40 PM By JON VIKTOR D. CABUENAS,GMA News

Philippine manufacturing expanded for the eighth straight month in September to mark the biggest growth in three months, according to results of the latest survey by S&P Global Market Intelligence.

The S&P Global Philippines Manufacturing Purchasing Managers' Index (PMI) stood at 52.9 in September, up from 51.2 in August. Expansion is marked by a print above the 50.0 threshold, while contraction is indicated by a figure below.

The latest performance is the fastest in three months since June 2022, and faster than the series average of 51.8.

“Firms noted that an increase in customer demand allowed production levels and factory orders to grow for the first time since June,” S&P global economist Maryam Baluch said in an accompanying statement.

“Adding to the good news, inflationary pressures, which have been uncomfortably high in the past couple of months, moderated in the latest survey period, hinting that inflation may have peaked,” she added.

Inflation clocked in at 6.3% in August

, slightly slower than the 6.4% recorded in the previous month.

September data is scheduled to be released next Wednesday, October 5, with the central bank expecting an even faster rate due to higher electricity rates and food prices.

“That said, inflation rates remained sharp and could still be harmful to demand conditions, with firms citing rising material and energy prices, alongside an unfavorable exchange rate, which could place upward pressure on costs,” Baluch said.

The latest survey indicated that inflationary pressures eased in September, with the rate of input price growth easing to a 20-month low while charges levied increased at a weaker rate than the previous month.

Vendor performance also continued to deteriorate, with average lead times growing to a six-month high due mainly to shipping delays and port congestion.

In a separate commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort welcomed the latest performance, but flagged possible risks to manufacturing growth such as inflation, higher interest rates, and recession fears in the United States.

“The missing pieces of the economic recovery story, tourism (foreign and local) and face-to-face/in-person schooling (100% target by November 2022), already resumed and on the right track to bring along related/allied businesses/industries, including some manufacturers, towards a greater recovery path, going forward,” he said. —KG, GMA News

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