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Production index grew for the second month in a row in March with Philippine businesses recovering from the COVID-19 pandemic
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The Purchasing Managers’ Index stayed above the 50.0 no-change threshold, rising from 52.8 in February to 53.2 in March
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The headline index was at its peak since December 2018, signalling solid improvement in operating conditions in the country’s manufacturing sector
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But the Ukraine conflict, rising COVID-19 cases in China, scarce materials and supply bottlenecks further worsened supplier delivery times
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Shipment delays due to port congestion and high fuel prices led to intensified pressures on supply chains in March
Philippine manufacturers registered an increase in production for the second straight month in March to a more than three-year high, as businesses continued their recovery from the COVID-19 pandemic.
The Philippines’ Purchasing Managers’ Index rose to 53.2 in March from 52.8 in February, continuing growth above the 50.0 no-change threshold, according to the latest survey by S&P Global.
The headline index was the highest since December 2018, signalling a solid improvement in operating conditions in the Philippine manufacturing sector.
The latest survey data linked easing pandemic restrictions earlier this year to expansions in both new orders and output during March. In both cases, the expansions were solid overall and above their respective long-run series averages.
S&P Global said demand for Philippine goods rose at the fastest pace since July 2019, matching the demand in February.
However, the picture was negative internationally. New export orders received by Filipino manufacturers declined in March, after expanding for the first time in seven months in February. The pandemic was a recurring reason for the latest downturn, although underlying demand conditions in external markets were reportedly subdued.
“Whilst the country recovers from the pandemic, with alert levels downgraded and restrictions eased, international concerns and supply-side performance constrained the momentum of growth,” S&P Global economist Maryam Baluch said in a statement.
“The war in Ukraine, COVID-19 cases rising in China, scarcity of materials and supply bottlenecks led to further worsening of supplier delivery times. Moreover, inflationary pressures reached record highs as cost burdens and selling prices rose at faster paces,” Baluch added.
Shipment delays due to port congestion and high fuel prices reportedly led to intensified pressures on supply chains in March, as lead times lengthened to a greater extent than in February.
As a result, Baluch said, firms continued to accumulate inputs and build inventories to buffer against future supply-chain disruptions and price increases.
With pandemic restrictions easing and customer demand picking up, firms remained strongly positive on their outlook for output over the coming year. Where optimism was reported, some companies linked this to hopes for a positive election outcome in May, when the nation chooses a successor to outgoing President Rodrigo Duterte.
