Philippines PMI January 2021


Philippines: Manufacturing PMI jumps to over two-year high in January

February 1, 2021

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 52.5 in January from December’s 49.2, hitting a 25-month high. The PMI thus landed well above the crucial 50-threshold, and signaled a solid improvement in manufacturing sector conditions.

January’s upturn was largely attributed to a modest increase in output and a solid rise in new orders, amid strong demand. Moreover, although firms reduced staffing levels once again in a bid to reduce costs, they did so at the weakest rate in 11 months. Meanwhile, the tightening of Covid-19 restrictions in key trading partners resulted in contracting new export orders, while optimism among firms moderated in January. Lastly, on the inflation front, input price costs rose sharply, amid raw material shortages, which prompted firms to hike selling prices in turn.

Shreeya Patel, economist at IHS Markit, said:

“"January data indicated a rebound in operating conditions across Filipino manufacturing sector after three successive months of decline. […] That said, signs of fragility remained evident with staffing cuts and sharp cost pressures mounting. At the same time, virus-related restrictions contributed to substantially longer delivery times and subdued foreign demand.”

FocusEconomics Consensus Forecast panelists see manufacturing output rising 6.5% in 2021, which is up 0.8 percentage points from the previous month’s estimate. For 2022, the panel expects manufacturing output to increase 6.4%.


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Philippines PMI Chart

Philippines PMI January 2021

Note: Philippines Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month while readings below 50 indicate an overall decrease.
Source: IHS Markit.

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