Philippine factories return to expansion mode

MANILA, Philippines —  The Philippine manufacturing sector expanded in December 2025, reflecting improving demand conditions.

In a statement, S&P Global said the Philippines’ manufacturing purchasing managers’ index rose to 50.2 in December 2025 from 47.4 a month earlier.

Generated from a survey of around 400 firms, the PMI measures the health of the manufacturing sector through new orders, output, employment, suppliers’ delivery times and stocks of purchases.

A PMI reading above 50 means an overall increase from the previous month, while below 50 indicates a decline.

“December PMI data signaled a slight improvement in operating conditions in the Filipino manufacturing sector, an encouraging move from the solid deterioration seen in the month prior,” S&P Global Market Intelligence economist Maryam Baluch said.

New orders received by manufacturers in December  2025 rose for the first time in four months, driven by improving demand from the domestic market, even as new export orders declined.

Firms made efforts to raise capacity in line with higher orders, but output declined moderately in December last year.

As new orders increased, Baluch said manufacturers increased their purchasing activity in December 2025 for the first time since September 2025.

Employment in the manufacturing sector showed signs of stabilizing in December last year amid a slower decline in staffing compared to November 2025.

“That said, the improvement was tepid across the sector and its sustainability will largely depend on whether demand can be maintained and further bolstered, bringing growth back to production,” Baluch said.

She said the sector also faces headwinds from declining export market conditions, which limit its potential for growth.

“Consequently, at present, the manufacturing sector’s growth is primarily being driven by domestic demand, with external markets offering little support,” she said.

While manufacturers expect output to rise this year, S&P Global said the degree of optimism dipped from November’s recent 12-month high.