Philippine factory PMI slips to 49.1 as demand remains weak
Manufacturers cut purchasing and jobs in October, while confidence about future production rose to its highest level in nearly two years.
The Philippines recorded another month of shrinking factory activity in October, with S&P Global’s manufacturing Purchasing Managers’ Index (PMI) easing from 49.6 in September to 49.1. Weak demand kept both production and new orders on a downward path.
October was the second consecutive month of contraction. The index uses 50 as its dividing line: lower readings show deterioration from the preceding month, while higher readings show improvement. Demand was subdued among domestic and overseas buyers, and some surveyed businesses linked this to hot weather associated with El Niño.
Siân Jones, principal economist at S&P Global Market Intelligence, described the reductions in output and orders as modest. She said a deeper cut in purchasing, alongside further employment losses, pointed to continued caution among manufacturers.
Despite that caution, finished-goods stocks rose for the first time in four months as firms anticipated increased production. Jones said confidence climbed to a near two-year high, supported by expectations of new customers and projects over the coming year, but greater optimism had not yet revived orders or hiring.
Jones also said higher borrowing costs following the Bangko Sentral ng Pilipinas’ latest rate rise—50 basis points to 5.50 per cent—could further limit demand and investment.
