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The Philippine manufacturing sector slowed in January from December 2024 with the Philippines Manufacturing Purchasing Managers’ Index at a five-month low
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The Philippines PMI posted at 52.3 in January 2025 from December 2024’s 32-month high of 54.3
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“2025 shaping up to be another strong year of growth for the Philippines manufacturing sector with industrial production growth forecasted at 3.9% in 2025, up from 2.4% in 2024,” according to S&P Global
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New orders and output continued to rise, albeit the rates of growth moderated from December’s recent highs
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PMI survey respondents expressed confidence that output would rise in the coming year, supported by expectations of improved market demand and the upcoming election period
The Philippine manufacturing sector slowed in January from December 2024 with the Philippines Manufacturing Purchasing Managers’ Index (PMI) at a five-month low.
The Philippines PMI posted at 52.3 in January 2025, down from December 2024’s 32-month high of 54.3, according to the latest survey of S&P Global.
READ: PH December manufacturing expands for 16th straight month
Still the January PMI was above the 50 index which represents an expansion when compared with the previous month. This signaled a solid improvement in the health of Philippine manufacturing conditions, S&P Global noted.
In January, S&P Global said demand for Filipino goods continued to improve, although the pace of expansion in new business experienced a slight slowdown from the recent high recorded in December.
Nevertheless, the rate of expansion in intakes of new orders remained historically robust, as firms reported that strong client demand and the acquisition of new customers drove increased sales.
The solid underlying demand trends contributed to a further rise in manufacturing output. The growth rate was, however, the second-weakest in the current 10-month sequence of increase, as competition and rising raw material prices reportedly limited production activity. Despite these challenges, expectations of increased sales prompted firms to boost their purchasing activity in January.
Companies also focused on stock building, with both pre- and post-production inventories rising at historically strong rates during the latest survey period.
Notably, stocks of finished goods recorded a fresh increase following a sharp decline in December.
Supply chains, meanwhile, remained under pressure in January, with the latest survey data indicating another month of deteriorating vendor performance.
Shortages of delivery trucks and port congestion were cited as reasons for extended average lead times for inputs. However, the extent of the decline in vendor performance was the least pronounced in five months.
Employment in the manufacturing sector remained largely stagnant for the second consecutive month in January. While growth in new sales encouraged some firms to hire more staff, this was offset by reports of resignations.
Goods producers, meanwhile, continued to manage their outstanding work effectively in January, S&P Global noted.
However, the respective seasonally adjusted index rose notably, posting just shy of the neutral 50.0 mark as some firms noted pending work from the month prior.
Regarding prices, both cost burdens and output charges increased at similar, but historically subdued, rates. Rising prices for materials and transportation contributed to higher cost burdens, which manufacturers opted to largely pass on to their clients.
Survey respondents expressed confidence that output would rise in the coming year.
“We could see 2025 shaping up to be another strong year of growth for the Philippines manufacturing sector with industrial production growth forecasted at 3.9% in 2025, up from 2.4% in 2024. In fact, the anticipation of greater demand has already prompted goods producers to increase their inventory levels,” S&P Global Market Intelligence economist Maryam Baluch said.
“The election year is also likely to provide a general boost to the manufacturing sector, as highlighted by some survey respondents,” Baluch added.
