S&P Global survey: Philippine factory output picked up in July

Philippine manufacturing picked up in July from the 11-month low from the previous month on the back of stronger demand, results of the latest survey conducted by S&P Global released on Tuesday showed.

The headline S&P Global Philippines Manufacturing PMI stood at 51.9 in July, up from 11-month low of 50.9 in June.

“The latest PMI reading for the Filipino manufacturing sector signaled a stronger improvement in operating conditions at the start of the third quarter,” S&P Global economist Maryam Baluch said in a commentary.

“Continued improvement in the underlying demand picture helped drive the latest upturn, with both production and new orders recording stronger rates of expansion. New export orders also increased during July,” she added.

New orders posted stronger growth during the month, with foreign demand recording up for the seventh successive month, while new export orders accelerated to a three-month high.

The purchasing activity for the month posted the fastest growth since January, while pre-production inventories declined as firms utilized pre-existing stock to fulfill order requirements.

Capacity pressures eased during the month, as firms said they were able to keep up with production requirements. Firms were also paired back staffing levels for the second straight month.

Respondents reported a further deterioration in vendor performance, with average lead times lengthening for the second straight month, with the delivery time marking the worst since December 2022.

“(T)hough July data reported a slight intensification of price pressures, rates of both input price and output charge inflation have eased considerably from the highs seen over the last three years,” Baluch said.

“The latest data adds to our current forecast that the central bank will abstain from further tightening its monetary policy in the near-term,” she added.

Inflation clocked in at 5.4% in June, down from 6.1% in May, and the fifth straight month of deceleration from a peak of 8.7% in January. It is also the lowest rate in 15 months. — RSJ, GMA Integrated News