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The Philippine manufacturing sector slowed in February based on the latest S&P Global Philippines Manufacturing PMI
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PMI dipped to 51.0 in February from 52.3 in January, indicating continued but modest expansion in the sector
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New orders and output growth slowed, with new export orders at a seven-month low and production growth at its weakest since July 2024
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Employment levels rose for the first time in three months, as manufacturers responded to sustained, albeit slower, demand growth
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Business confidence declined to a 10-month low, though manufacturers remain hopeful demand will improve with the upcoming elections
The Philippine manufacturing sector slowed in February based on the latest S&P Global Philippines Manufacturing PMI (Purchasing Managers’ Index)
PMI dipped to 51.0 in February from 52.3 in January, indicating continued but modest expansion in the sector.
The headline PMI for February marked the second consecutive monthly decline. While the index remained above the 50.0 threshold—indicating continued expansion—the growth rate was the slowest in nearly a year.
The softening in manufacturing activity was driven by a slowdown in new orders, which expanded for the 18th straight month but at the weakest pace in seven months. Export demand also cooled, contributing to the moderation in factory output, which saw its slowest growth since July 2024.
“Robust growth observed from the end of the previous year into the beginning of this year waned in February, as the latest survey data indicated slower expansions in output and new orders,” said Maryam Baluch, economist at S&P Global Market Intelligence.
“(Inflationary) pressures eased, thus suggesting that the central bank will continue to proceed with a loosening of its monetary policy. This could in turn boost somewhat weakened business confidence and support further new order growth,” Baluch added.
With weaker production requirements, manufacturers scaled back their purchasing activity, marking the slowest pace of expansion in 15 months. Firms also turned to existing inventories to meet order requirements, leading to the first decline in input stock holdings in three months.
Despite the cooling demand, manufacturers resumed hiring in February, marking the first rise in employment levels in three months. The increase, though marginal, reflected efforts to manage capacity constraints as backlogs of work grew for the first time in five months—the most pronounced accumulation in nearly two years.
A notable easing in cost pressures provided some relief to manufacturers. While raw material shortages and transportation costs continued to push up input prices, the rate of inflation slowed to a nine-month low. Similarly, the increase in output prices was the weakest in 10 months.
Looking ahead, manufacturers remained “optimistic” about the outlook for production in the months ahead. Firms cited the upcoming elections as a factor and “would provide an additional boost.” However, business confidence in the manufacturing sector weakened to a 10-month low.
