Philippine manufacturing decelerates in May 2025
The Philippine manufacturing sector posted a deceleration in May to signal a broad stagnation in operating conditions, results of the latest survey conducted by S&P Global released on Monday showed.
The headline S&P Global Philippines Manufacturing PMI stood at 50.1 in May, down from 53.0 in April, and close to the 50.0 threshold that separates expansion from contraction.
'The promising growth observed at the beginning of the second quarter signalled a notable cooling in May, according to the latest PMI data,' S&P Global Market Intelligence economist Maryam Baluch said in a commentary.
'While new orders continued to increase, they did so at a slower pace, overshadowed by contractions in other areas. Notably, output, employment, and the inventories of both purchases and finished goods all experienced fresh declines,' she added.
S&P attributed the softer growth in input buying activity to the slowdown in new order growth, while manufacturers said it took longer to receive essential materials and supplies during the month. The replenishment of stocks of inputs depleted for the first time in three months.
'The situation was further exacerbated by a deteriorating demand from foreign markets, with May witnessing a sharper drop in new export orders. As global trade tensions escalate, the outlook for overseas demand appears increasingly precarious,' Baluch said.
Workforce numbers likewise declined during the month, falling into contraction territory, as job shedding posted its strongest in 11 months due to voluntary resignations and non-replacement of such roles.
The limited manpower then trickled into the buildup of backlogs across Philippine manufacturers, with the accumulation rate overall modest.
'On a brighter note, inflationary pressures remain modest and historically subdued, which could play an important role in supporting demand moving forward,' Baluch said.
'The stability of price pressures may also provide a necessary buffer against the challenges posed by a cooldown in new orders and external market uncertainties,' she added.
Survey responses were collected in the second half of the month, taking into account responses from purchasing managers in a panel of around 400 manufacturers. The PMI is a weighted average of new orders, output, employment, suppliers' delivery times, and stocks of purchases.
The Philippine Statistics Authority (PSA) is scheduled to release official government figures on manufacturing for the month of May on July 8, 2025. — BM, GMA Integrated News
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