Philippines' Manufacturing PMI Second Lowest Among Select Southeast Asian Economies
Key Takeaways
- •Philippine manufacturing activity fell back into contraction territory in September, registering the sector's first monthly decline since April.
- •Weak demand, elevated oil prices, and strong international competition were identified as the main factors dragging on manufacturers.
- •The Philippines posted the second-lowest manufacturing PMI among the Southeast Asian economies tracked, with just one other surveyed economy recording a weaker figure.
- •The Manufacturing PMI, compiled by S&P Global from monthly purchasing managers' surveys, signals expansion above 50 points and contraction below that threshold.
- •Observers will watch the next monthly PMI release to determine whether September's contraction continues or was only a one-month dip.
Philippine factory activity contracted sharply in September, posting its first contraction since April, as weak demand, high oil prices and strong international competition weighed on manufacturers, according to a BusinessWorld Online infographic tracking regional manufacturing conditions.
The downturn left the Philippines with the second-lowest manufacturing Purchasing Managers' Index (PMI) reading among select Southeast Asian economies covered in the graphic — only one other economy in the surveyed group recorded a lower figure.
The Manufacturing PMI is a widely followed gauge of factory-sector health, compiled for the Philippines by S&P Global from monthly surveys of purchasing managers. Readings above the 50-point threshold indicate month-on-month expansion, while readings below 50 signal contraction. September's sharp pullback therefore marks a reversal for Philippine manufacturing, with weak demand, elevated oil prices and strong international competition cited as the main drags on activity. Because it is drawn from monthly survey responses, the index is often used as an early read on factory-sector momentum, and the return below the 50 line shows activity slipped back into contraction after several months in expansionary territory.
BusinessWorld published the infographic on October 1 alongside a companion report offering fuller detail on the month's PMI results: PMI sharply contracts in September.
With the sector back below the 50-point line, attention will turn to the next monthly reading for an indication of whether September's contraction persists or proves a one-month dip.
