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The Philippine manufacturing sector’s purchasing managers’ index slipped into negative territory in September 2025 as producers saw fresh contractions in output and new orders
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Headline PMI fell to 49.9 in September from 50.8 in August
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While signaling just a fractional deterioration in the health of the manufacturing sector, this was only the third time in just over four years where the headline index has been in contraction territory
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Along with demand weakness, S&P Global survey panelists indicated that poor weather conditions and import restrictions on rice had negatively impacted output
The Philippine manufacturing sector’s purchasing managers’ index (PMI) slipped into negative territory in September 2025 as producers saw fresh contractions in output and new orders.
The manufacturing sector’s headline PMI – a composite single-figure indicator of manufacturing performance – fell to 49.9 in September from 50.8 in August, which was below the 50.0 no-change threshold, according to the latest survey of S&P Global.
While signaling just a fractional deterioration in the health of the manufacturing sector, this was only the third time in just over four years where the headline index has been in contraction territory.
“The Philippines PMI survey data showed the manufacturing sector moving into negative territory at the end of the third quarter which, despite indicating only a fractional decline, has been highly unusual in the sector’s post-pandemic history,” S&P Global Market Intelligence senior economist David Owen said in a statement.
“New orders and output decreased slightly, as firms mentioned a fall in client numbers and a modest drop in production from the suspension of rice imports,” Owen added.
Weaker operating conditions were mainly attributed to a renewed — albeit marginal — drop in new order intakes in September, S&P Global noted.
The decline in sales was the first in six months, as surveyed businesses remarked on lower customer numbers.
Order books with foreign clients, however, continued to improve, signaling that the downturn was mainly centered on the domestic market.
S&P Global said reduced sales volumes led Filipino manufacturers to scale back production at the end of the third quarter, which ended a three-month sequence of expansion.
Along with demand weakness, S&P Global survey panelists indicated that poor weather conditions and import restrictions on rice had negatively impacted output.
READ: 60-day rice import suspension takes effect Sept 1
Nevertheless, manufacturers continued to increase their purchases of raw materials and other key components in September, though the rate of growth softened from August and was only slight. Greater buying activity helped to bolster stocks of purchased goods.
In contrast, post-production inventories declined due to lower output as well as some efforts to reduce backlogs of work, which dropped for the first time since April.
As was the case in August, the survey data also pointed to a subdued jobs market in September. Sustained efforts to raise input buying came amid further optimism towards the production outlook.
READ: PH manufacturing remains muted in Aug 2025
Although easing slightly from August, the level of business confidence was the second-highest since last November. Survey comments showed that firms were generally confident of an improvement in sales over the coming 12 months supporting higher output.
September data indicated a solid increase in input costs across the Philippines manufacturing sector. The rise was less marked than in August, but the second-strongest since the beginning of the year.
Firms responded with a marginal increase in selling prices. Anecdotal evidence signaled that rising material prices were the primary factor behind heightened costs and increased charges.
