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The Philippine manufacturing sector again saw a subdued performance in August 2025, with growth rates for output and new orders remaining below historical averages
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The headline Philippines Manufacturing Purchasing Managers’ Index remained broadly consistent with figures seen since June, with the latest reading of 50.8 in August, only slightly down from 50.9 in July
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Manufacturing output rose for the third consecutive month, supported by a rise in new business
The Philippine manufacturing sector again saw a subdued performance in August 2025, with growth rates for output and new orders remaining below their historical averages, according to the latest survey of S&P Global.
The headline Philippines Manufacturing Purchasing Managers’ Index (PMI)– a composite single-figure indicator of manufacturing performance–remained broadly consistent with figures seen since June, with the latest reading of 50.8 in August, only slightly down from 50.9 in July.
The headline figure indicated a further improvement in health of the Filipino manufacturing sector, but one that was historically subdued and only marginal overall, S&P Global said in a statement.
Manufacturing output rose for the third consecutive month in August, with the pace of increase reaching its fastest rate in four months and only slightly softer than the series average.
READ: PH manufacturing returns to growth in July
Supporting the upturn in output was a sustained rise in new business, S&P Global noted. The growth rate was broadly in line with that observed in July, with anecdotal evidence pointing to new customer acquisitions and improved underlying demand trends as driving the latest expansion.
Manufacturers in the Philippines also indicated a strengthening of foreign demand for goods, with the growth rate quickening to a seven-month high.
The rise in production requirements encouraged firms to purchase inputs at a faster pace, with August data signaling the sharpest upturn in four months. However, manufacturing employment in the Philippines was stable in August, thereby ending a two-month sequence of job growth.
The combination of rising production requirements and stagnant employment resulted in a further build-up of backlogs of work, with the rate of accumulation the fastest in six months.
To fulfil new orders, S&P Global said manufacturers tapped into their post-production inventories, leading to a renewed and modest decline in stocks of finished goods in August.
Cost burdens increased at an accelerated pace during August, however, which manufacturers attributed in part to higher material prices. Firms sought to pass the higher costs to customers.
Nevertheless, many manufacturers chose to remain competitive, resulting in a moderation in the pace of selling price inflation, which was the slowest in four months.
Looking at the year ahead, companies across the Philippines noted greater confidence in the outlook for output during August. The respective index ticked up for the fourth month running to the highest since November 2024.
Firms were hopeful that demand conditions will improve and support production. However, positive sentiment remained subdued compared to the long-term series average.
