A recent private reading indicated that the Philippines' factory activity in December 2024 experienced the most significant growth since November 2017, driven by a robust increase in output and new orders. The headline S&P Global Philippines Manufacturing PMI, which serves as the purchasing managers' index, remained in expansionary territory, advancing to 54.3 from 53.8 in November.
This highlights a positive trend, as a PMI index above 50 signifies expansion while any index below 50 reflects contraction. The surge in output and new orders, crucial components for the PMI's growth, was primarily fueled by a renewed spike in demand from international markets, leading to an uptick in export orders for the first time in five months.
Despite rising material costs, there is a noted moderation in inflationary pressures during December—a welcome shift from the preceding month's heightened strain on prices, as pointed out by Maryam Baluch, an economist at S&P Global Market Intelligence. Baluch commented, 'In fact, cost burdens and output charges rose at historically muted rates.' Companies in the sector remain optimistic about future growth prospects, with analysts at S&P projecting that output will increase in 2025 and that demand will strengthen further.
In tandem, businesses are preparing to launch more products, indicating a positive outlook for the upcoming year..