PH manufacturing facility exercise ‘moderated’ in February 2025

Native factories have recorded an uptick in gross sales as a result of “strong” demand for Filipino merchandise. —Picture from Fb of the MEPZ Staff Affiliation

MANILA, Philippines — Philippine manufacturing facility exercise expanded at a softer tempo for the second straight month in February after the same old increase in demand through the vacation season light, though rising backlogs had triggered a recent rise in employment.

A survey of round 400 producers confirmed the Philippines’ Buying Managers’ Index (PMI)—a gauge of the well being of the manufacturing sector— stood at 51 in February, S&P International reported on Monday.

READ: PH factories posted ‘modest’ enchancment in February

Whereas the most recent studying settled above the 50-threshold separating enlargement from decline, the February PMI was down from the 52.3 recorded in January as development in each output and new orders slowed.

Demand

In a commentary, Maryam Baluch, economist at S&P International Market Intelligence, stated the top of the Christmas procuring season put the brakes on sturdy manufacturing exercise that was seen on the shut of 2024.

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“Sturdy development noticed from the top of the earlier 12 months into the start of this 12 months waned in February,” Baluch stated.

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Survey knowledge confirmed the enlargement in new orders—together with demand from abroad markets—was the weakest in seven months in February. That, in flip, weighed on manufacturing, with output development posting the slowest tempo of enhance since July 2024.

Employment up

In response to easing manufacturing exercise, Filipino producers needed to mood their enter shopping for, which grew on the weakest clip in 15 months. Manufacturing prices likewise softened in February, leading to a “fractional” enhance in promoting costs.

However regardless of the moderation within the total manufacturing exercise, S&P stated demand circumstances remained comparatively sturdy, which put strain on capability.

Firms had reported a rise in backlogs of labor for the primary time in 5 months. To meet all orders, S&P stated native producers had to make use of their inventories, leading to a decline of their enter inventory holdings, a primary in three months.

Companies additionally needed to increase their headcount to fulfill the demand. Whereas the rise in hiring was marginal, S&P stated the rise in employment snapped two months of flattish staffing numbers.

Shifting ahead, S&P’s Baluch stated additional price cuts to the central financial institution’s coverage price may assist help native manufacturing exercise.

“In the meantime, inflationary pressures eased, thus suggesting that the central financial institution will proceed to proceed with a loosening of its financial coverage,” she stated.

“This might in flip increase considerably weakened enterprise confidence and help additional new order development,” she added. INQ