towards Aubrey Rose A. Inosana, Reporting
Philippine factory worker Well Sorperply in November – the steepest drop in more than four years – as the result and new orders fell amid the weather disruption.
IS & P PHILIPPINES Dealing Purchasing Managers’ Index (PMI) VIEW AT 47.4 in November, Back from 50.1 in October.
In a report, S & P Global said this signaled a “significant deterioration” in operating conditions in the Philippine manufacturing sector as of August 2021.
“Issuances and new orders indicated their fastest rates since August 2021, driven by weak customer demand. Exports, purchases and employment declined, It reflects broader challenges in the sector,” Trevor Balchin, S&P’s director of global market intelligence, said.
Headline PMI is a composite indicator of operating performance. A PMI reading below 50 indicates an overall deterioration in working conditions compared to the previous month, while a reading above 50 indicates better working conditions.
The Philippines was the only country in the Association of Southeast Asian Nations (ASEAN) to see a decline in manufacturing activity in November. Asean PMI rose to 53 in November from 52.7 in October, as new orders and production accelerated.
Based on S&P ASAN PMI data, Thailand recorded the highest PMI reading at 56.8, followed by Vietnam (53.8), Indonesia (53.3), Malaymar (51.4), and Malaysia (50.1).
In August, the US began imposing 19% retaliatory tariffs on most goods from the Philippines, Cambodia, Indonesia, Thailand and Indonesia.
IS&P Global said Philippine manufacturers saw new orders drop for the third straight month, and at the fastest rate since August 2021. This is attributed to reduced demand due to Product Life Cycle Changes. “
Note that new export orders fell for the second straight month, and at the fastest pace since September 2024.
“Production followed the same trend with new orders in November, crossing the third month running and at the fastest rate since August 2021. Many businesses also noted that the storm had caused disruption to business activities,” it said.
IS&P Global said a sharp drop in new orders led to a decline in purchasing activity for the second month in a row. This company is motivated to reduce their inventory for the first time in five months.
“The rate of peaks was the fastest in more than five years. Meanwhile, delivery times for retailers were shortened for the first time since April 2024, only slightly,” it added.
Manufacturers are also laying off workers for the first time since May.
“The overall level of layoffs was only marginal, but the fall was linked to financial restructuring and contract renewals. The backlog ended in a year quickly,” P Global said.
Inflationary pressures eased in November, mainly due to lower demand for consumer goods.
“Input prices have been reduced to a four-month low, remaining below the long-term trend, while prices have moved slightly,” Mr Balchin said.
Despite the decline in new orders, manufacturers were optimistic about output growth over the next 12 months. IS & P Global noted that overall sentiment was the strongest since November 2024.
“However, there were signs of promise, as manufacturers expressed more confidence in the next 12 months, I expect growth due to new projects and improved economic conditions,” said Mr. Balchin.
“Overall, while the manufacturing sector is facing immediate challenges, the outlook suggests cautious optimism for continued growth,” he added.
Meanwhile, analysts say the slowdown in manufacturing activity can be attributed to hurricanes and earthquakes that hit parts of the country in November.
IS&P Global Market Intelligence Director Directoria Jingyu Pan said the decline in local factory output in November was likely to be temporary, driven by bad weather rather than weakened by broader weakness.
“As we re-assess the comments from the producers from whom we collect survey responses, it appears that the back-to-back typhoons that hit in November actually had a significant impact on the Philippines,” he said in an interview. Money Talks with Cathy Yang In news one on Monday.
Several storms hitting the country have disrupted demand and disrupted factory operations, he said.
Ms Pan said she expects factory activity to recover in December as a result of the weather disruption.
“It is in the receiving area of the local production area which was still affected by weather-related disturbances especially the spillover effects of typhoons and earthquakes which reduced its production,” said Rizal Commerce Banking Corp. We are searching.
Mr Ricafort said November is usually the tail end of ventilation and production ahead of the holiday season.
He also noted the slide of the peso to a record low last month raised import costs, although this was part of the estimate made by the bangko sentral ng Pipipinas
John Paolo R. Rivera, Senior Research Fellow at the Philippine Institute for Development Studies, said some firms may have scaled back production due to recent economic uncertainty and cuts in government projects.
“Some producers are cautiously bailing out the commodity industries as they wait for clear signals on demand heading into 2025,” he said.
Mr. Rivera warned that Scored’s decline in performance could continue in December and early 2026 if business confidence remains weak and the peso remains volatile.
“But a recovery is possible if holiday spending provides temporary storage capacity and that government spending is often considered until they see a clear policy demand,” he said.
Meanwhile, economic secretary Arsenio M. Balisacan said the Philippine manufacturing sector continues to face high business costs, mainly due to infrastructure gaps.
“We talked about digital communication, but also our physical infrastructure, transportation, energy. We have several challenges. That’s why in the last few meetings,” he said in the infrastructure of other children on Monday.
Another problem for the government is ensuring EFefSpending, notes that 5-6% of the gross domestic product may not reach the targeted projects due to fraud.
