Philippine manufacturing growth slowed to three-month low in February — S&P Global

The Philippine manufacturing output softened in February to mark the weakest expansion in three months, results of the latest survey conducted by S&P Global revealed.

The S&P Global Philippines Manufacturing PMI stood at 52.7 in February, down from the seven-month high of 53.5 in January, but still above the 50.0-threshold that separates expansion and contraction.

“(O)ngoing supply chain concerns continued to remain a drag on the sector,” S&P Global Market Intelligence Economist Maryam Baluch said in an accompanying statement.

“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,” she added.

Costs burdens remained at high levels, attributed to the “intensification” in price pressures, with the central bank expecting inflation to have fallen within the 8.5% to 9.3% range.

S&P Global reported greater demand from customers and a growing clientele, but the expansions in output and new orders expanded at a slower rate.

“(W)ith production requirements increasing at a softer pace in February, employment fell slightly for the first time in three months,” S&P Global Market Intelligence Economist Maryam Baluch said in an accompanying statement.

The employment index fell for the second straight month, reflecting the first decline in workforce numbers since November 2022, as firms reported resignations and active layoffs of staff.

The government has yet to release employment figures for February, with the latest data indicating that there were more jobless Filipinos in December, bringing the unemployment rate to 4.3%.

“Despite the ongoing supply-side challenges and an uncertain international climate, the Filipino manufacturing sector has remained resilient, benefitting greatly from domestic demand,” Baluch said.

“Firms hope that the buoyancy in the market is maintained as we progress further into the year,” she added.

The S&P Global Philippines Manufacturing PMI is compiled from responses of purchasing managers in a panel of around 400 manufacturers. It is a weighted average of new orders, output, employment, suppliers’ delivery times, and stocks of purchases.

Responses are collected in the second half of each month, indicating the direction of change compared with the previous month.

The Philippine Statistics Authority (PSA) is scheduled to release official government figures on manufacturing for the month of February on May 9, 2023. — RSJ, GMA Integrated News