Factory activity declines in April

Mideast crisis stifles manufacturing

MANILA, Philippines — Philippine manufacturing activity slipped into negative territory in April due to weak demand and higher costs stemming from the Middle East conflict.

In a statement yesterday, S&P Global said that the Philippines’ purchasing managers’ index (PMI) for manufacturing fell to 48.3 in April from 51.3 in March.

This is the first time the PMI registered a contraction since November last year.

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

The PMI measures the health of the manufacturing sector through a survey of 400 manufacturers, taking into account new orders, output, employment, suppliers’ delivery times and inventories.

“The Filipino manufacturing sector started the second quarter of 2026 with a renewed worsening of operating conditions as the headline index fell below the neutral 50 reading for the first time in five months,” S&P Global Market Intelligence economist Maryam Baluch said.

She said manufacturers’ new orders declined in April amid deteriorating export market demand.

The Middle East conflict, which led to the closure of trade routes, resulted in halted shipments and created hesitancy among customers.

“Production levels stagnated and firms made cuts to purchasing and hiring activity as they grappled with high costs, often said to be feeding through from the war in the Middle East,” Baluch said.

While manufacturers reduced staffing numbers, they managed workloads and reduced backlogs.

Higher energy and shipping costs, which pushed up operating expenses, were largely passed on to consumers through increased factory gate charges.

“However, manufacturing firms in the Philippines expect to shake off current woes, as confidence for the year ahead rose to a 17-month high,” Baluch said.

The positive outlook is supported by expectations of improving demand and a growing client base in the coming months.