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The Philippine manufacturing sector contracted for the first time in 19 months last March but forecasts for the year ahead remained upbeat, results of the latest survey conducted by S&P Global released on Wednesday showed. The headline S&P Global Philippines Manufacturing PMI stood at 49.4 in March, down from the 51.
0 in February, and the first time in three and a half years that the reading fell below the 50.0 threshold that separates expansion and contraction. "The Filipino manufacturing sector indicated a renewed deterioration in operating conditions in March.
Furthermore, the health of the sector worsened at the strongest pace since August 2021," S&P Global Market Intelligence economist Maryam Baluch said in a commentary. "Panellists noted that growing competition and fewer clients led to a reduction in new orders, with output scaled back as a result," she added. The latest figures marked an end to the 11-month output growth sequence, with new sales posting the first decline in 19 months.
The survey found that new business declined during the year, along with foreign client demand. Hiring activity for the month was also paused as firms cited sufficient manpower to support business requirements, with outstanding work down. "Nonetheless, businesses remain optimistic in their year-ahead production forecasts, with confidence levels at a four-month high," Baluch said.
"Optimism was reflected in firms' decisions to maintain their purchasing activity and build stocks. At the same time, inflationary pressures remained relatively contained and subdued in the context of the series history," she added. This comes as respondents were hopeful that demand trends would pick up in the coming months, as they cited plans for new projects and client wins as the additional drivers of their optimism.
Survey responses were collected in the second half of the month, taking into account responses from purchasing managers in a panel of around 400 manufacturers. The PMI is a weighted average of new orders, output, employment, suppliers' delivery times, and stocks of purchases. The Philippine Statistics Authority (PSA) is scheduled to release official government figures on manufacturing for the month of March on May 7, 2025.
— VDV, GMA Integrated News.
