Overseas news
In the US, manufacturing saw its 3rd consecutive month of contraction. The ISM Manufacturing Purchasing Managers’ Index (PMI) fell to a 6-month low of 48.5 in May from 48.7 in April.
PMI is an index that shows if market conditions are seen as expanding (index over 50), staying the same (index at 50), or contracting (index under 50).
Relatedly, suppliers faced longer delivery times as higher US tariffs likely caused bottlenecks in the supply chain. This potentially signals upcoming shortages of select goods.
In the Eurozone, manufacturing activity recovered in May but still fell below the index threshold of 50 that separates growth from contraction.
The manufacturing PMI, published by S&P Global and Hamburg Commercial Bank (HCOB), rose to 49.4 in May from 49.0 in April, marking a 33-month high.
Meanwhile, Japanese firms’ capital spending surged 6.4% in the 1st quarter of the year to reach a record 18.8 trillion yen (USD130 billion). This surpassed the previous high set in 2007.
Japan’s domestic industries drove growth, but export sectors spent less amid US tariff concerns. Increased business spending may contribute to economic growth if it helps create jobs and satisfy consumer demand.
Local developments
The Philippines is expanding its rice import sources beyond Vietnam to help ensure steady supply. Talks are underway with countries such as India, Pakistan, Cambodia, Myanmar, Indonesia, and Thailand, said Department of Agriculture (DA) Secretary Francisco Tiu Laurel.
The availability of food staples such as rice is an essential part of a nation’s food security, and may impact inflation if such items become limited in supply and thus more expensive.
Meanwhile, the S&P Global Philippines Manufacturing PMI fell to 50.1 in May from 53 in April, its lowest level since hitting 49.4 in March. Output declined and foreign demand weakened amid global trade tensions.
The 90-day pause on higher US tariffs is set to end in July, and the anticipation for increased tariffs may have affected global demand for goods.
Today’s news skews negative, though there is little indication of big changes happening right away. Holding off on big investing decisions may be a good move for now.
