The Philippines' manufacturing sector continued to expand in July at a better pace than the month prior, according to the latest S&P Global Purchasing Managers' Index report released on Friday.

The index edged up to 50.9 in July, from 50.7 in June, staying above the 50 threshold that separates contraction from expansion.

During July, output and new orders continued to rise, while new business grew at a faster rate. This led to an increase in production levels for the second month running.

On the pricing side, inflationary pressures stayed mild, with input costs rising at the slowest pace in the ongoing 14-month stretch of rising expenses, according to S&P.

Looking ahead, manufacturers maintained an optimistic outlook for output for the next year, S&P said.