THE Philippines’ manufacturing sector continued to grow in August, supported by modest growth in output and new orders, but overall performance was said to be subdued compared to historical standards.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 50.8 last month, easing from 50.9 in July but still above the 50.0 threshold marking an expansion from a contraction.
“The headline figure indicated a further improvement in health of the Filipino manufacturing sector, but one that was historically subdued and only marginal overall,” S&P Global Market Intelligence said on Monday.
Output and new orders continued to grow, manufacturers ramped up purchasing activity and confidence also rose, S&P Global noted, but at rates below historical averages.
Production rose for a third straight month — the pace was said to be the fastest in four months and slightly softer than the series average — as growth in new business remained broadly unchanged.
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Foreign demand, which hit a seven-month peak, prompted companies to increase purchases of raw materials, but an end to two months of job growth led to backlogs accumulating at the fastest pace in six months.
Businesses tapped into post-production inventories to fulfill new orders, leading to a modest drawdown in stocks of finished goods.
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“Reductions have now been noted in three of the last four survey periods, with some firms reporting that they released stock onto the market to mitigate potential damage at warehouses from heavy rainfall,” S&P Global said.
Inflationary pressures stayed relatively subdued even as input costs rose at a quicker pace, partly due to higher prices. Firms moved to pass these on to customers but many opted to limit price hikes to remain competitive.
As a result, selling price inflation eased to a four-month low.
“[S]ubdued cost pressures, coupled with manufacturers’ efforts to control their pricing in a bid to remain competitive, could provide the boost firms need to regain sales momentum,” S&P Global economist Maryam Baluch said.
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Business confidence, meanwhile, strengthened for a fourth consecutive month to its highest since November 2024.
Firms were said to have expressed optimism that demand conditions would continue to improve over the coming year. Baluch, however, said that “while overall sentiment in the year-ahead outlook remained optimistic and even strengthened compared to the previous month, confidence fell short of the long-run average.”
