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Philippines PMI March 2024

Philippines: Manufacturing PMI softens in March amid supply challenges

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 50.9 in March from 51.0 in February. As a result, the index remained above the 50.0 no-change threshold, but signaled a slightly softer improvement in manufacturing sector operating conditions compared to the previous month.

Key drivers behind the latest PMI reading include a further expansion in new orders received in March, although the rate of growth moderated and was the second-weakest in the current seven-month sequence of expansion. Production fell for the first time in 20 months due to material shortages and softer demand conditions. Despite these challenges, there was a notable increase in employment, marking the strongest rate of job creation in one and a half years, and a continued rise in buying activity as firms aimed to rebuild inventory levels.

In terms of prices and business sentiment, March saw a reduction in input cost inflation to the weakest pace since October 2020, driven by smaller price hikes from suppliers amid the El Niño weather pattern and material shortages. This contributed to Filipino manufacturers reducing their selling prices for the first time in nearly four years. However, confidence levels in the sector’s outlook for the coming year dropped to a near four-year low, with concerns over growing market competition impacting performance.

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