Filipino manufacturers recorded a strong improvement in operating conditions in November as demand continued to strengthen, leading companies to expand production levels faster and gear up for anticipated sales growth in the coming months.
However, supply-side challenges including typhoon impacts and inflationary pressures made the operating environment for companies difficult, according to the latest Purchasing Managers’ Index (PMI) data from S&P Global.
The headline S&P Global Philippines Manufacturing PMI—a composite single-figure indicator of manufacturing performance—rose from 52.9 in October to 53.8 in November, marking the 15th consecutive monthly improvement in the health of the Filipino manufacturing sector and indicating a 29-month high since mid-2022.
“November saw the Filipino manufacturing sector ramping up production in anticipation of greater sales in the coming months. Hiring, purchasing activity and post-production inventories were also raised in preparation. New sales recorded further growth, as demand conditions continued to improve,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
Manufacturers logged a notable acceleration in production during the latest survey period as they eagerly anticipated a sales boost in the months ahead. Production quickened from October, partly to support the increase in current new sales and partly to support inventory building as stocks of finished goods rose for the first time in four months.
Demand conditions improved for the 15th straight month, although the pace of increase moderated to a three-month low. Companies responded by expanding their capacity further as job creation was recorded for a third straight month. The pace of increase was just shy of October’s recent peak, said S&P.
Purchasing activity surged as well, with the rate of expansion accelerating over the month. However, this increase in input buying did not translate into a rise in pre-production inventories, as companies often utilized inputs directly for production.
But while operating conditions improved, companies struggled with strained supply chains and heightened inflationary pressures.
“Adverse weather conditions stemming from recent typhoons and their impact led to port congestion and flooding and severely impacted delivery times for inputs, with average lead times lengthening rapidly and to the most significant degree in over three years,” said the report.
Meanwhile, inflationary pressures intensified. Rising costs from suppliers and raw materials resulted in a rapid increase in expenses, which was the strongest since February 2023. Consequently, charges for Filipino manufactured goods rose sharply, with output charge inflation also hitting a 21-month high.
Despite these challenges, manufacturers expressed strong optimism regarding future output in November. Sentiment reached its highest level since early 2023, as firms were hopeful that improving demand conditions and the upcoming election year would support further expansions.
