The Philippine production sector grew fastest in the region in September, according to reports, when the country defied a slowdown in Southeast Asia during the month.
International think tank IHS Markit has announced the latest results of the Philippines Purchasing Managers' Index (PMI) in the region on Monday, with the Philippines topping the list of the seven jurisdictions that assess the think tank on a monthly basis.
Production conditions in the country improved at the end of the third quarter of this year, with an increase in PMI to 52 in September compared to the 51.9 recorded a month ago.
The PMI is a composite index intended to measure the health of the processing industry in the country. It is calculated as a weighted average of five separate subcomponents.
Readings above the 50-threshold signal indicate a growth in the production sector, whereas readings below 50 show a deterioration in the industry.
IHS Markit Principal Economist Bernard Aw said the strong print from September showed further signs of strong demand and is likely to signal a steady manufacturing sector in the coming months.
"In general, Philippine production companies are optimistic about the outlook for the coming year," said Aw.
Survey data show a robust customer demand, solid new business growth, sufficient operational capacity to handle higher sales, lower arrears, employment earnings and higher input purchases.
These were tempered by a fall in export sales, lower foreign orders, lower input inventories and longer delivery times.
Aw said that while the local manufacturing industry remains stable, the threat of rising consumer goods prices continues to amaze the industry.
"Research data from September suggests that growth is likely to be buoyant in the coming months, while strong cost inflation remains a major concern," the economist said in a statement.
"In terms of inflation, other companies saw their sales prices rise in September with the second highest score in the history of the survey," he added.
The most recent inflation data from the BSP showed that inflation was 6.4 percent in August this year, with monetary policy revising its inflation forecast from 2018 to 5.2 percent, compared to the previous 4.9 percent.
52 PMI of the Philippines is the fastest in the region, followed by 51.5 in Malaysia and Vietnam. Indonesia is now fourth at 50.7 followed by Thailand with a PMI of 50.
In the contract area, Singapore with a 48 PMI and Myanmar were 47.5.
On average, the region's PMI fell from 51 in August to 50.5 in September.
"The revival of production in Asean lost momentum at the end of the third quarter, with slower growth in both new orders and exports, and export sales continued to decline," Aw said in a statement.