The S&P Global Philippines manufacturing purchasing managers’ index (PMI) dropped to 50.1 in May from 53 in April, signaling a sharp slowdown in sector growth.
The latest reading, just above the 50.0 threshold that separates expansion from contraction, reflects a marked loss in momentum driven by a renewed decline in output as firms reported softer demand conditions. Business planners and economists use it as a guidepost on the general direction of the economy.
The pullback in production marks the second contraction in three months. Employment also declined for the first time in four months and at the steepest rate in nearly a year, mainly due to voluntary resignations and companies choosing not to replace departed staff.
Price pressures remained relatively tame, though both input costs and output charges rose to their highest levels since January, hinting at mild inflationary stirrings.
Despite the deceleration, firms retained a cautiously optimistic outlook, expecting new orders to support future production.
