MANILA, Philippines — Local factories managed to eke out output growth in July, fueled by improving demand for Filipino goods, as purchasing activity hits its fastest pace since the start of 2023.
Results of a survey of around 400 companies showed the Philippines’ Purchasing Managers’ Index (PMI) — a measure of factory output — climbed up to 51.9 in July, from 50.9 in June, S&P Global said in a report on Tuesday.
The latest reading stayed above the 50-threshold separating growth from contraction. Maryam Baluch, economist at S&P Global, said the figures pointed to strong operating conditions at the start of the third quarter.
“Continued improvement in the underlying demand picture helped drive the latest upturn, with both production and new orders recording stronger rates of expansion,” she said.
The July figures also spotlighted the demand for Filipino goods was driven by foreign clients, helping export sales post grow during the month. Foreign demand registered an uptick in the seventh straight month, while new export orders rose to a three-month high.
S&P Global noted that the operating conditions continued to improve, on a monthly basis, within the past 18 months.
The recovery in production in July wasn’t confined to orders, as output growth picked up after easing to a 10-month low back in June.
That said, there were snags in production in July. Local factories witnessed average lead times extended for the second straight month, while deliveries hit their worst pace since December 2022.
Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said the latest outturn showed signs of recovery for local factories.
“This is a welcome development given the current dour outlook on global trade and could give hope for a recovery down the road,” he said in a Viber message.
“Meanwhile, the reduction in payroll numbers was a bit disappointing but given that a portion on the decline was tagged to resignation could signal workers shift to more lucrative opportunities,” Mapa added. — Ramon Royandoyan