PHILIPPINE manufacturers struggled with workforce challenges but industry conditions remained positive in May as output and demand kept growing, S&P Global Market Intelligence said on Monday.

The country's Purchasing Managers Index slipped to 51.9, slightly down from 52.2 in April, but remained above the 50.0 mark for a ninth straight month.

The result "indicated a modest improvement in operating conditions and one which was broadly in line with the series average," S&P Global said.

Sales growth fractionally improved month-on-month and gains in underlying demand, plus a larger customer base, also allowed sales to stay positive for nine consecutive months.

New export orders rose for a fourth straight month and the growth was said to be the strongest since December 2016.

Firms subsequently boosted output and S&P Global said the growth was the fastest year-to-date.

Companies hiked purchases of inputs and inventory accumulation was the strongest in 13 months.

Job shedding, however, occurred for the first time since December last year and companies said that this was primarily due to workers choosing to quit.

Still, backlogs continued to fall in an indication that companies were ready to handle the rise in demand.

Costs fell marginally — some firms reported switching to more competitively priced suppliers — but manufacturers also raised prices at a faster pace.

Expectations for the year ahead picked up for the first time in five months and optimism hit a nine-month high.

Firms were said to be hopeful of further demand improvements and were planning to expand operations and introduce new products.

"The Filipino manufacturing sector continued to report further gains midway through the second quarter, with growth sustained in new orders and output," S&P Global economist Maryam Baluch said.

"Subdued inflationary pressures and a further improvement in the demand picture indicates that economic growth will likely be sustained in the coming months," she added.