The country’s manufacturing activity continued its gradual recovery in June, marking a second consecutive month of expansion as improving demand and easing supply chain pressures supported output growth in the goods-producing sector.

The latest S&P Global Market Intelligence survey showed the Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 50.9 in June from 50.8 in May, indicating a modest but sustained improvement in operating conditions after earlier disruptions linked to external geopolitical tensions, particularly the Middle East crisis.

S&P said the uptick was driven by stronger new orders, which encouraged manufacturers to raise production for a second straight month.

On the other hand, export demand also showed signs of stabilizing, helping support overall order inflows despite lingering global uncertainties.

S&P noted that supply chain conditions also improved, with delivery delays easing to their lowest level since December, while firms cautiously increased their purchases of raw materials and semi-finished goods.

Inflationary pressures softened during the month, with input cost increases slowing to their weakest pace in four months. Output price growth also decelerated, suggesting a more stable pricing environment for manufacturers.

Despite the improvement in activity, business confidence weakened to its lowest level since January, as firms remained cautious about future demand and ongoing cost pressures. S&P Global economist Maryam Baluch said sentiment reflected a sector that is gaining momentum but remains wary of the outlook.