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Philippines PMI May 2024

Philippines: Manufacturing PMI falls in May, but conditions still improve

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 51.9 in May from 52.2 in April. As a result, the index remained above the 50.0 no-change threshold but signaled a softer improvement in manufacturing-sector operating conditions compared to the previous month.

May’s downtick stemmed largely from the first month of job shedding in five months. That said, there were solid increases in production and new orders, alongside accelerated growth in new export orders—the most pronounced since December 2016. Growth in both domestic and international sales was attributed to improved demand conditions and an expanded customer base. Additionally, firms responded to these growing business requirements by raising their production volumes and building up their stocks.

Regarding costs, input prices fell for the first time since April 2020, with some companies attributing this to a switch to more competitively priced suppliers. Despite the drop in costs, charges were raised at an accelerated pace, as firms aimed to build their profit margins. Looking forward, business optimism reached a nine-month high, driven by expectations of sustained economic growth, further improvements in demand conditions and plans for business expansion and new product introductions.

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