Philippines Manufacturing Sector Stabilizes

The S&P Global Philippines Manufacturing PMI fell to 51.3 in March 2026 from 54.6 in February, marking a three-month low. Softer expansions in output and new orders were attributed largely to the war in the Middle East, which also led to a modest decline in new export sales. As a result, firms broadly paused purchasing activity, while inventories of pre-production items fell modestly for the first time in four months. Input prices surged amid higher energy costs and material shortages, causing operating expenses and factory gate charges to rise sharply. Employment growth continued for a third consecutive month but at the slowest pace in this sequence, while backlogs of work increased at the fastest rate in four months due to delays in receiving inputs. Despite these challenges, manufacturers’ sentiment regarding the 12-month outlook improved to a four-month high, with firms hopeful that easing geopolitical tensions and demand conditions will support growth in the year ahead.

The S&P Global Philippines Manufacturing PMI increased to 54.6 in February 2026 from 52.9 in January. This marked the third consecutive month of growth and the strongest performance since November 2017. Manufacturers reported that sustained growth in new orders led them to raise production levels, achieving the quickest pace of output growth since November 2018. As a result, firms expanded their purchasing activity at the sharpest rate since January 2025 and stepped up inventory-building efforts. They also increased staffing numbers for a second consecutive month; however, these measures were not enough to prevent a renewed accumulation of work backlogs, which rose at the fastest pace in three months. On the pricing front, manufacturers noted falling operating costs, which allowed them to reduce their own charges. Finally, sentiment regarding the 12-month outlook for output improved, rebounding notably from the recent low recorded in the previous month.

The S&P Global Philippines Manufacturing PMI rose to 52.9 in January 2026 from 50.2 in December, marking the highest level since April 2025. New orders continued to increase, supported by a renewed rise in export orders. As a result, production returned to expansion territory for the first time in five months. Higher production requirements prompted firms to expand their workforce after two consecutive months of modest declines, helping to reduce backlogs of work. Additionally, purchasing activity grew at its fastest pace in a year, while input inventories rose for the first time in three months. Price pressures remained subdued, with input cost inflation broadly unchanged from December’s recent low and only marginal overall, while prices charged rose only slightly. However, business confidence for the year ahead deteriorated sharply, recording its second-weakest reading on record, behind that seen in March 2020.