Philippines manufacturing holds steady as orders slip

Hiring rises, costs stay soft, but export demand weakens and production remains under pressure.

The S&P Global Philippines Manufacturing PMI rose to 50.1 in October 2025, from 49.9 in September, signalling broadly stable factory conditions.

Yet beneath the headline, output and new orders contracted again, and firms cut purchasing for the first time since November 2023.

“A closer examination of the Philippines PMI data revealed a mixed picture in October. The two largest segments, new orders and output, indicated further declines. Additionally, fresh contractions were observed in new export orders and purchasing activity, highlighting underlying demand conditions,” said Maryam Baluch, Economist at S&P Global Market Intelligence.

New orders fell for a second straight month, with the decline in new export orders the strongest in a year. Production followed suit, staying in contraction but at a slower pace. In response to softer demand, manufacturers reduced input buying for almost two years.

Backlogs of work continued to shrink for a second month, while some cancellations nudged inventories higher in places. Delivery times lengthened again in October, reaching the sharpest pace in three months, reflecting ongoing supply-chain frictions even as demand softens.

Cost pressures remained subdued. The rate of input price inflation was modest and the weakest in three months. When costs did rise, it was largely due to higher supplier and material costs. In response to weak demand, producers lowered selling prices for the first time in 19 months, with the decline the steepest since April 2020.

Employment rose again, with the latest increase the strongest in three months, signalling ongoing recruitment. Sentiment about the year ahead improved, with firms more confident about higher output next year. The overall PMI remained just above the 50 threshold, suggesting the sector is barely holding its ground.

“Analysts note the near-term path will depend on reviving consumer demand and any policy or macroeconomic catalysts that can lift activity,” Baluch added, emphasising that the sector’s resilience will hinge on demand and policy support.