Philippine Manufacturing Activity Rises for 2nd Month

The S&P Global Philippines Manufacturing PMI rose to 51.8 in July 2026 from 50.9 in June, marking the third consecutive month of growth and the strongest since February. Stronger underlying demand and new project wins drove the fastest growth in new orders and output in five months, prompting manufacturers to increase purchasing activity. However, firms drew down both raw material and finished goods inventories to meet rising demand as supplier delivery times deteriorated sharply, largely due to supply chain disruptions linked to the Middle East conflict. Employment declined after stabilizing in June, reflecting voluntary resignations and firms' reluctance to replace departing workers. Meanwhile, input costs and selling prices accelerated to above their long-run averages as higher costs were passed on to customers. Despite stronger business activity, confidence remained historically subdued as ongoing geopolitical uncertainty and inflationary pressures continued to cloud the outlook.

The S&P Global Philippines Manufacturing PMI edged up to 50.9 in June 2026 from 50.8 in May, marking a second consecutive month of expansion in the manufacturing sector. Growth in new business was sustained, with output rising for a second month, although the pace of expansion softened. The downturn in new export orders also eased significantly. Manufacturers raised their purchases of raw materials and semi-finished items for the first time in four months. At the same time, employment levels were unchanged, marking a stabilization after workforce reductions in April and May. Backlogs rose for the first time in three months, pointing to renewed pressure on capacity. In addition, lead times lengthened to the least marked extent since last December. Inflationary pressures also eased, offering some relief to manufacturers. Nonetheless, confidence fell to its lowest since January, indicating that firms remain cautious about the outlook despite the sector's improving momentum.

The S&P Global Philippines Manufacturing PMI rose to 50.8 in May 2026 from 48.3 in April, signaling a renewed improvement in manufacturing sector conditions. New orders increased after a sharp decline in April, supported by improved client demand and new customer wins, leading firms to raise production at a solid pace. However, export demand remained weak, with new orders from abroad falling at the sharpest rate since July 2020. Lead times lengthened to one of the greatest extents in nearly a year-and-a-half, amid shipping delays and efforts by companies to consolidate orders to contain costs. Input cost inflation accelerated to its highest level since August 2022, while output price inflation rose to its second-fastest pace in three and a half years. Firms reduced purchasing activity for a third month and cut staffing levels at the fastest rate in two years. Nevertheless, business confidence rose to an 18-month high amid hopes that demand conditions will improve.