MANILA – The Philippines' manufacturing sector surpassed the performance of its Southeast Asian neighbors in September, as shown by the latest purchasing managers’ index (PMI) survey, IHS Markit reported Monday.
In its Nikkei manufacturing PMI for September, the Philippines scored 52, which is higher than the average of Association of Southeast Asian Nations’ (ASEAN) index of 50.5.
This is also higher than Malaysia’s and Vietnam’s scores of 51.5, Indonesia’s 50.7, and Thailand’s 50.
Manufacturing scores 50 and above represent growth in the industry, while indices below 50 show deterioration.
On the other hand, manufacturing index of Singapore and Myanmar were at 48 and 47.5, respectively.
The manufacturing survey of IHS Markit noted that growth in new orders remains solid despite the lackluster demand from foreign markets.
It added that the domestic market has kept the demand afloat amid declining exports.
“The survey also brought further signs of firm demand. Order book growth remained solid, even though export sales fell for the first time in seven month, suggesting that domestic markets continued to support the sector’s expansion,” IHS Markit Principal Economist Bernard Aw said.
Hiring activities of manufacturing firms also posted growth last month, the report read.
“September data suggest that growth in the coming months is likely to be resilient,” Aw added.
However, inflation remains a key concern for the manufacturing sector’s performance in the coming months, according to IHS Markit’s survey.
“On the inflation front, another steep rise in input costs saw firms raising selling prices at the second-fastest rate in the Survey history during September.,” Aw said.
“However, inflation was partly driven by typhoon-related factors. That said, a weaker peso, supply shortages, higher global commodity prices, and the TRAIN (Tax Reform for Acceleration and Inclusion) laws continued to drive the inflation higher,” he added.
Aw added that Philippine-based manufacturing companies remain optimistic about their business outlook in the year ahead. (PNA)
