Philippine manufacturing extended its recovery for a second straight month in June as stronger domestic demand lifted factory output and new orders, although businesses turned more cautious about the months ahead.
The latest S&P Global Philippines Manufacturing Purchasing Managers’ Index rose to 50.9 in June from 50.8 in May, staying above the 50-point mark that signals expansion. The reading suggests factories continued to regain their footing after earlier disruptions linked to tensions in the Middle East.
New orders and production both grew for a second consecutive month, with demand improving at a slightly faster pace as manufacturers secured new clients. Output also increased, although at a slower rate, indicating firms remained measured despite healthier sales.
The improving demand picture prompted manufacturers to replenish inventories for the first time in four months, while supply chain conditions also improved. Delivery delays eased to their mildest level since December, allowing firms to better manage production schedules.
Employment stabilized after two months of job cuts, while a modest rise in unfinished work hinted at improving capacity utilization and the potential for additional hiring if demand continues to strengthen.
Manufacturers also caught a break on costs. Input prices and factory gate charges continued to increase but at a slower pace, easing pressure on margins after months of elevated inflation.
Still, optimism faded.
Business confidence slipped to a five-month low as firms worried that earlier cost increases and lingering economic uncertainties could weigh on profits and future demand.
“Manufacturing conditions in the Philippines continued to improve in June, building on the tentative recovery observed in May,” said Maryam Baluch, economist at S&P Global Market Intelligence. She added that while demand is recovering, manufacturers remain cautious about the broader outlook, suggesting the sector’s rebound is gaining traction but has yet to fully regain its confidence.
