Manufacturing activity in the Philippines surged to its strongest level in nearly a decade in August, sustaining its expansion for the fourth straight month on the back of easing inflationary pressures that fueled new orders and lifted business confidence.
According to S&P Global on Tuesday, September 1, the country’s Purchasing Managers’ Index (PMI) climbed to 54.9 in August from 51.8 in July, marking the strongest improvement in the sector since December 2016, when the index stood at 55.7.
For the fourth month in a row, the manufacturing sector has remained above the 50-point threshold separating expansion from contraction, extending its recovery from the slump in April.
“The Filipino manufacturing sector continued to build momentum in August, moving on from the flat performance seen in the previous quarter, when activity was affected by the conflict in the Middle East,” said Maryum Baluch, an economist at the S&P Global Market Intelligence.
New orders grew at their fastest pace in six months, supported by new product and model launches. Demand from overseas also improved, with new export orders rising for the first time in six months.
Better production efficiency likewise supported the rise in manufacturing activity after input purchases grew at their fastest pace in six months, while staffing levels increased for the first time in five months.
“Encouragingly, production rose at its fastest pace since 2016, helped by stronger demand conditions. Firms responded by increasing both purchasing and hiring to keep up with greater production needs,” Baluch added.
While companies continued to face higher costs for energy, raw materials and logistics, the increase in input prices slowed significantly in August.
Easing cost pressures came as headline inflation had slowed for three straight months after peaking at 7.2 percent in April, reaching 6.2 percent in July.
This helped lift business confidence to its highest level since November 2024, with manufacturers expressing optimism about the year ahead amid expansion plans, the introduction of new product lines and expectations of stronger orders and new customers. (Nyah Genelle C. De Leon © Phiippine Daily Inquirer)
