The country's manufacturing Purchasing Manufacturers Index trended above the neutral 50-point threshold for the 10th month running, indicating an improvement in the health of the manufacturing sector, data from S&P Global showed on Thursday.

Manufacturing rose fractionally from 52.6 in October to 52.7 in November, as the headline figure signaled a modest rate of growth, data showed.

Demand conditions remained strong midway through the fourth quarter, as Filipino manufacturing output and factory orders grew for the third consecutive month.

"Growth across the manufacturing sector entered its 10th successive month, with modest expansions in operating conditions seen since September. The improvement across the sector primarily stemmed from greater demand conditions which drove higher sales and output."

S&P Global Market Intelligence economist Maryam Baluch said.

The rates of increase recorded were the fastest since June. The latest upturns were strong in the context of historical data.

Moreover, the S&P said export conditions remained weak during November, thereby extending the current sequence of contraction in new export orders observed since March.

"Weak foreign client demand weighed on total new order growth across the sector which was primarily driven by domestic demand," it added.

Nonetheless, the downturn in export sales softened from October's recent low. Firms increased their purchases of inputs for the third month running in November, to support growth in overall sales and in anticipation of higher orders in the coming months, the S&P said.

The rate of expansion quickened from October to the fastest in six months and signaled a solid increase overall.

Growth in output and buying activity resulted in stocks of inputs increasing during November.

Pace of accumulation quickened over the course of the month to the fastest since May.

Businesses increased their holdings in anticipation of greater demand. Backlogs of work fell during November. Surveyed business reported that improvements in production efficiency allowed firms to work through unfinished business.

However, firms also recorded a reduction in staffing numbers during the latest survey period, thereby ending the run of job creation that began in May.

Resignations among employees was commonly cited as a reason for the fall in workforce numbers.

On the price front, inflationary pressures remained elevated. The rate of input price inflation gathered pace for the second month running, as higher energy costs were primarily blamed for the latest uptick in expenses.

Similarly, output prices increased at a quicker rate during November as firms chose to pass costs on to clients. Prices pressures presents a challenge to the sector, which is further exacerbated by the peso weakening against the dollar.

"While the manufacturing sector has shown strong gains during 2022, elevated price pressures pose an ongoing threat. Coupled with supply-chain issues, the peso weakening against the dollar adds further fragility. To curb inflation rates, Bangko Sentral ng Pilipinas raised interest rates by 75 base points during November," Baluch said.

Furthermore, S&P said that supply-chain pressures continued to persist during November. While, the incidence of delays was at three-month low, port congestion and material shortages meant that vendor performance deteriorated strongly.