Hanoi (VNA) – The Philippines’ manufacturing activity deteriorated further in April, slipping back into contraction territory for the first time in five months as the Middle East conflict continued to disrupt trade flows and stall production, according to a latest survey by S&P Global.
The survey, covering around 400 companies, showed the Philippines’ Purchasing Managers’ Index (PMI) fell to 48.3 from 51.3 in March, dropping below the 50-point threshold that separates growth from contraction.
Operating conditions deteriorated again at the start of the second quarter amid clearly weakening demand, it said.
Economic analyst Maryam Baluch from S&P Global said pulling down the headline figure was a fresh and sharp decline in new orders.
Manufacturing output largely stagnated, with firms cutting back on input purchases and hiring as costs surged, mainly driven by rising oil prices linked to the conflict. Notably, new export orders posted their steepest drop since mid-2020, as shipments were delayed and clients turned more cautious.
Rising operating costs forced companies to pass part of the burden onto selling prices, pushing output price inflation to its fastest pace in over three years. As a result, demand continued to soften, prompting firms to reduce staffing levels for the first time in 2026.
The survey highlighted that the impact of the conflict has gone beyond cost pressures, beginning to inflict real damage on the demand side.
Despite these challenges, the S&P survey showed Philippine firms remained optimistic, with business confidence rising to a 17-month high on expectations that demand and customer bases will improve in the coming time./.
