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Philippines PMI December 2023

Philippines: Manufacturing PMI remains in expansionary terrain in December

The S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell to 51.5 in December from November’s 52.7. Consequently, the index remained above the 50.0 no-change threshold, pointing to a continued, albeit softer, improvement in manufacturing sector operating conditions from the previous month.

Robust growth in output underpinned December’s above-threshold reading. Additionally, purchasing activity recovered following November’s decline. Nevertheless, operating conditions improved less than in the prior month due to a demand-led slowdown in new business, weaker vendor performance and a sharper fall in employment figures.

Meanwhile, rising fuel, material and shipment prices led to rises in both input and output inflation in December. Lastly, optimism among manufacturers strengthened to a four-month high as firms hoped for stronger demand ahead.

Maryam Baluch, economist at S&P Global, commented on the outlook:

“Sluggish demand from overseas markets and tight borrowing conditions across the country will act as headwinds as we move into 2024. That said, inflationary pressures are expected to pose less of a threat than seen at the start of 2023, despite gaining pace during December.”

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