The Philippines’ manufacturing sector contracted in March for the first time in 19 months, with the purchasing managers’ index (PMI) falling to 49.4, S&P Global said on Monday.
The March reading, down from 51.0 in February, marked the sharpest deterioration in operating conditions since August 2021, according to the S&P Global Philippines Manufacturing PMI. A reading below 50 indicates contraction.
“The Filipino manufacturing sector indicated a renewed deterioration in operating conditions in March,” said Maryam Baluch, economist at S&P Global Market Intelligence.
“Furthermore, the health of the sector worsened at the strongest pace since August 2021,” said Baluch.
The decline was attributed to a fall in new orders, both domestic and foreign, as companies cited increased competition and fewer clients. Export orders also declined after three months of growth.
Despite the contraction, business sentiment remained optimistic, reaching a four-month high as manufacturers anticipated increased demand from new projects and clients. Companies maintained purchasing activity and built stocks.
Employment remained flat, and inflationary pressures were subdued, S&P Global said.
The PMI is a composite single-figure indicator of manufacturing performance.
