• Manufacturing PMI lowest since Jan

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    The Philippines’ manufacturing PMI slipped in July, an IHS Markit/Nikkei survey found, as output and new orders moderated.

    Results released on Tuesday showed a seasonally adjusted Purchasing Managers’ Index of 52.8 for the month, down from 53.9 in June and from 56.3 a year earlier.

    The latest reading is also the lowest since January’s 52.7.

    The PMI is a composite index representing the weighted average of five individual sub-components, namely new orders, output, employment, suppliers’ delivery time and stocks.

    Readings above 50 signal an expansion in manufacturing while readings below the benchmark signal a contraction.

    IHS Markit economist Bernard Aw said the Philippines manufacturing economy started the third quarter on a softer note but the slowdown was likely to be short-lived.

    But business optimism remained elevated as the latest Future Output Index was similar to the previous month.
    However, there were concerns as to the situation in southern Philippines, where martial law in Mindanao has been extended by the government until the end of the year.

    In particular, Aw said surveyed firms mentioned that the Mindanao crisis had affected sales.

    “Nonetheless, the outlook for the manufacturing sector remains optimistic, driven by buoyant business confidence and strong sales volumes,” he said.

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