This is written by Luisa Maria Jacinta C.Jocson, Reporter
S&P Global reported that the Philippines experienced growth in September, fueled by strong domestic demand and an increase in new orders.
In September, the PMI for manufacturing in the Philippines, as reported by S&P Global, increased to 50.6 after a contraction of 49.7 in August.fl
Expecting a boost in the overall health of the manufacturing industry.
The data for September’s PMI indicated a resumption of growth in the manufacturing industry in the Philippines. This was due to an increase in new orders, leading to a faster expansion in output and an increase in staff.ffing levels,” Maryam Baluch, economist at S&P Global Market Intelligence, said in a statement.
A PMI reading above 50 indicates a positive change in operating conditions, while a reading below 50 indicates a decline.
Despite Ms. Baluch’s observation, the rate of expansion is still “historically slow,” suggesting that the industry is still struggling.
9th consecutive month.”
Additionally, recent data indicates that the domestic market played a significant role in supporting growth, while export sales continued to decline for the ninth consecutive month.fi
“It has been nine months since I last saw you,” she said.
In September, the Philippines had the second-highest PMI reading among Southeast Asian countries with available data. It was just behind Indonesia (52.3) but ahead of Myanmar (50.1). Meanwhile, Vietnam (49.7), Thailand (47.8) and Malaysia (46.8) all recorded contractions in September.
The PMI headline assesses manufacturing conditions by calculating a weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%), and stocks of purchases (10%).
The most recent PMI survey data from S&P Global indicated a resurgence in growth among manufacturers in the Philippines during the third quarter.
September saw a slight increase in new orders, which can be attributed to better demand and acquiring new customers.
“According to S&P Global, recent information has shown a decline in international business, making it the first month of decrease so far this year. Additionally, the rate of decrease was strong overall and exceeded the typical average.”
The rise in production requests was primarily influenced by local market demand, as the rate of expansion picked up from the previous 12-month low recorded in August.
According to S&P Global, there was an increase in hiring among manufacturers in September, breaking a three-month trend of job cuts. However, the rate of job growth was minimal, according to the report.
According to S&P Global, businesses have seen an increase in their demands, leading to a rise in their staff numbers. However, in September, there was a decrease in the amount of unfinished work for the third consecutive month, reaching the lowest level in seven months. This indicates that there is still unused capacity within the industry.
In September, manufacturers in the Philippines displayed different patterns in their inventory levels.
“While stocks of fi
According to S&P Global, there was an increase in finished goods as companies prepared for higher demand in the future. However, pre-production inventories decreased in September as companies used their existing stocks to fulfill current demand.
According to the report, stock levels decreased at the most rapid pace in almost three years. The decrease in stock levels was also accompanied by a halt in purchasing activity, marking the end of the period of growth in input buying that started in September 2022.
The most recent information revealed that costs remained relatively low, even as selling prices increased at the highest rate in four months.
“Ms. Baluch noted that while there has been a rise in material, fuel, and supplier costs, resulting in increased pressure on operating expenses and higher selling prices, the rates of both input prices and output charges have remained historically low.”
The latest report from rms showed a decrease in confidence for the upcoming 12 months, although overall they remained positive.
“In September, the overall sentiment declined to its lowest point in 15 months and was relatively subdued due to worries about the sustainability of demand. However, despite this, 40% of the experts predict an increase in output for the upcoming year,” the statement stated.
Ms. Baluch noted that global headwinds weighed on overall growth in September, with many fi
The RMS is worried about the long-term viability of demand in the future.
Nicholas Antonio T. Mapa, Senior Economist at ING Bank N.V. Manila, reported that an increase in local orders contributed to the Philippines’ PMI returning to a state of growth.
“Domestic demand helped off
He mentioned in a Viber message that there was a decline in export orders, but also noted a boost in employment due to preparations for the upcoming holiday season.
The Chief Economist of Rizal Commercial Banking Corp., Michael L. Ricafort, also observed that the rise in production can be attributed to the seasonal surge in manufacturing, production, and importation during the third quarter in anticipation of the upcoming holiday season.
ﬂationary pressures could still emerge
Nevertheless, Mr. Ricafort pointed out that there is a possibility of continued inflationary pressures arising.fl
Decreased production and elevated interest rates had a negative impact on the manufacturing sector.firms’ operations.
According to a survey by BusinessWorld, the inflation rate in September may have stabilized at 5.4%. This falls within the forecast range of 5.3-6.1% set by the Bangko Sentral ng Pilipinas (BSP) and is considered relatively low.
The local statistics authority plans to publish September’s data soon.fl
On Thursday, October 5th, we received information about the data.
Between May 2022 and March 2023, the Monetary Board has increased rates by 425 basis points. It maintained its main policy rate at 6.25%, which is the highest it has been in almost 16 years, for four consecutive meetings.