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The Philippine manufacturing sector stalled in May 2025 as output contracted and new orders waned
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The headline Philippines Manufacturing Purchasing Managers’ Index fell to 50.1 in May from 53.0 in April, signaling a broad stagnation in operating conditions, according to S&P Global
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Filipino manufacturers faced challenges in international markets, with May data indicating a stronger fall in new export orders
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Manufacturers reported longer lead times for receiving essential materials and supplies while cost burdens and output charges increased to the strongest extents since January
The Philippine manufacturing sector stalled in May 2025 as output contracted and new orders waned.
The headline Philippines Manufacturing Purchasing Managers’ Index (PMI)—a composite single-figure indicator of manufacturing performance—fell to 50.1 in May from 53.0 in April, signaling a broad stagnation in operating conditions, according to the latest survey of S&P Global.
“The promising growth observed at the beginning of the second quarter signalled a notable cooling in May, according to the latest PMI data,” S&P Global Market Intelligence economist Maryam Baluch said.
“While new orders continued to increase, they did so at a slower pace, overshadowed by contractions in other areas,” she added.
After April marked a solid revival for the health of the sector, Filipino manufacturers in May experienced a fresh decline in output, marking the second contraction in the last three months.
Overall, S&P Global said the downturn was marginal, but companies noted softer demand conditions weighed on production. Despite continuing to signal a rise in new sales, the rate of expansion in new orders was slight and weaker than in April.
Additionally, Filipino manufacturers faced challenges in international markets, with May data indicating a stronger fall in new export orders, following broadly steady export sales in March and April. The rate of contraction was fractional but the strongest since November of last year.
The slowdown in new order growth was reflected in the softer rate of increase in input buying activity. The latest uptick was only slight and the weakest in the current 18-month sequence of expansion.
Manufacturers reported longer lead times for receiving essential materials and supplies. S&P Global said this delay complicated the process of replenishing stocks of inputs, which were depleted for the first time in three months, despite a sustained rise in purchasing activity.
Manufacturers in the Philippines also recorded a fresh reduction in holdings of finished goods. Sustained growth in new orders led to firms utilizing inventories to meet demand requirements.
May data also marked a fresh decline in workforce numbers across the Philippines manufacturing sector, and was the first in four months. The rate of job shedding, albeit modest, was the strongest in 11 months.
Surveyed respondents linked the downturn to voluntary resignations and the non-replacement of those roles.
Limited manpower was also a reason cited for a renewed build-up of backlogs across goods producers based in the Philippines. The rate of accumulation was modest overall.
Inflationary pressures remained historically weak across the Filipino manufacturing sector in May, despite showing signs of slight intensification.
Cost burdens and output charges increased to the strongest extents since January, but pace of inflation were relatively modest overall.
Lastly, hopes that new orders will continue to rise supported confidence in the year-ahead outlook for production. Despite strengthening on the month, the level of sentiment was the third-weakest in the series history, with only optimism registered in March 2020 and in April 2025 being more subdued.
READ: PH April manufacturing conditions improve but confidence down
