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The Philippine manufacturing sector ended 2024 on a high note, with the Purchasing Managers’ Index expanding for the 16th consecutive month in December due to sharp growth in both output and new orders
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The headline Philippines Manufacturing PMI rose from 53.8 in November to 54.3 in December, the joint-strongest since November 2017
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Expansion in both new orders and output were reported, supported by anecdotal evidence of robust underlying demand trends, product diversification, and new client acquisitions
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Firms remained confident that output would rise over the coming year, amid hopes that demand trends will strengthen further and plans to launch new products
The Philippine manufacturing sector ended 2024 on a high note, with the Purchasing Managers’ Index (PMI) expanding for the 16th consecutive month in December due to sharp growth in both output and new orders.
The headline Philippines Manufacturing PMI—a composite single-figure indicator of manufacturing performance—rose to 54.3 in December from 53.8 in November, according to the latest PMI data from S&P Global.
The latest reading was the strongest since November 2017 alongside that seen in April 2022, S&P Global noted.
“The Filipino manufacturing sector ended 2024 on a positive note, with further improvements in demand resulting in sharp and significant increases in new orders and output,” S&P Global Market Intelligence economist Maryam Baluch said.
“Firms also expanded their purchasing activity to meet production requirements. December highlighted a moderation in inflationary pressures, marking a shift from the spike observed in November. In fact, cost burdens and output charges rose at historically muted rates.
“While production efficiency allowed manufacturers to stay on top of tasks at hand, it also led to a slight drop in employment, thereby ending a three-month streak of job creation. However, this could be a temporary blip, especially if demand remains resilient as anticipated throughout 2025.”
The two largest components of the PMI calculation—the output index and new orders index—positively influenced the headline figure in December.
S&P Global said sharp expansions in both new orders and output were reported, supported by anecdotal evidence of robust underlying demand trends, product diversification, and new client acquisitions.
Additionally, there was a renewed rise in demand from international markets, marking the first increase in new export orders in five months.
Growth in production requirements also spurred manufacturers to raise their purchasing activity.
Input buying rose sharply and at a rate which was the strongest in nearly two years. Moreover, a sustained increase led to a resumption of pre-production inventory building, following two consecutive months of contraction. The rate of accumulation was the most pronounced since November 2022.
Vendor performance, meanwhile, continued to deteriorate sharply in December, although to a smaller degree than November.
The surge in purchasing activity, however, strained supply chains, causing traffic and port congestion, according to the survey panelists.
December data also signaled a shift in hiring practices. After three months of continuous job creation, companies made a minor reduction to their staffing levels.
According to anecdotal evidence, strong production growth, despite higher intake of new orders, meant that firms were able to keep on top of their workloads. Moreover, the rate of backlog depletion was sharp and the most pronounced in 13 months.
Turning to prices, higher costs for materials and suppliers were often passed on to clients. However, the latest data highlighted a renewed moderation in inflationary pressures following November’s recent peaks, with cost burdens rising at a rate below its historical average. Consequently, charges were also raised at a slower and historically muted pace.
Lastly, firms remained confident that output would rise over the coming year, amid hopes that demand trends will strengthen further and plans to launch new products. That said, the degree of confidence slipped notably to a four-month low.
