The Philippine manufacturing sector expanded in December, reaching its highest level since April 2022, driven by increased output and new orders, according to the latest survey by S&P Global released on Thursday.
The headline S&P Global Philippines Manufacturing PMI rose to 54.3 in December, up from 53.8 in November. This matches the reading recorded in April 2022 and is among the strongest levels since November 2017. A PMI reading above 50.0 indicates expansion, while a reading below that threshold suggests contraction.
“The Filipino manufacturing sector ended 2024 on a positive note, with further improvements in demand resulting in sharp and significant increases in new orders and output,” said Maryam Baluch, an economist at S&P Global Market Intelligence.
Output and new orders saw the strongest growth in 32 months, supported by steady demand, product diversification, and new client acquisitions. Additionally, new export orders increased for the first time in five months, signaling renewed demand from international markets.
To meet production requirements, firms increased their purchasing activity. December also saw a moderation in inflationary pressures, in contrast to the spike observed in November. Cost burdens and output charges rose at rates below historical averages, indicating some easing in price pressures.
While higher material and supplier costs were largely passed on to clients, the survey showed that inflationary pressures moderated compared to November’s peak levels.
Employment in the sector saw a slight decline, ending a three-month period of job creation. However, firms reported being able to manage workloads efficiently despite the increase in new orders. The backlog depletion rate was the most pronounced in 13 months, suggesting improved production efficiency.
Looking ahead, firms anticipate resilient demand throughout 2025, which could influence employment trends in the sector.
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