Philippine manufacturing growth ‘weaker’ in July

MANILA, Philippines — The Philippines’ manufacturing sector expanded further in July, but at a weaker pace amid slower growth in both output and new orders, according to monthly tracking done by IHS Markit for Nikkei, Inc.

The seasonally adjusted Nikkei Philippines Manufacturing Purchasing Managers’ Index slipped to 50.9 in July from 52.9 in June. A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction, Nikkei explained.

The July figure was the lowest for five months and represented only a marginal improvement in the health of the sector. Among Southeast Asian economies, the Philippines ranked second in terms of manufacturing growth, next to Vietnam’s 54.9.

“New business grew at a much slower rate in July after a solid second quarter, despite a strong pick up in export sales. Slowing demand presents a worrying development and raises questions whether the recovery from the rollout of new excise taxes at the start of this year is losing steam,” said Bernard Aw, principal economist at IHS Markit.

“Input cost inflation remained marked in the manufacturing sector during July which, in turn, led to further increases in selling prices. Although charges were raised at a notable pace, the rate of increase remained far weaker than that of costs, suggesting pressure on profit margins,” Aw added. — Ian Nicolas Cigaral