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Manufacturing conditions in the Philippines continued to improve in June 2026, building on the tentative recovery observed in May as the sector regained footing following disruptions linked to the Middle East conflict
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The manufacturing sector’s headline PMI posted at 50.9 in June 2026, slightly up from May’s reading of 50.8
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The two largest PMI sub-components, new orders and output, rose for a second month running in June
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June data also highlighted signs of a recovery in supply chain disruption, with manufacturers signalling only a modest deterioration in vendor performance and lead time lengthened to the least marked extent since December last year
Manufacturing conditions in the Philippines continued to improve in June 2026, building on the tentative recovery observed in May as the sector regained footing following disruptions linked to the Middle East conflict, according to the latest S&P Global purchasing managers’ index (PMI) survey data.
The manufacturing sector’s headline PMI – a composite single-figure indicator of manufacturing performance – posted at 50.9 in June 2026, slightly up from May’s reading of 50.8, thereby signalling a second consecutive month of modest improvement in operating conditions. A reading above 50 indicates an overall increase compared to the previous month, and below 50 an overall decrease.
“Output and new orders expanded further during the month, with broader PMI gauges signalling renewed purchasing activity and a stabilised employment picture.,” S&P Global Market Intelligence economist Maryam Baluch said in a statement.
The two largest PMI sub-components, new orders and output, rose for a second month running in June.
Trends diverged, however, as growth in new orders strengthened slightly while production growth eased, with firms indicating only a marginal increase.
S&P Global said according to anecdotal evidence, where firms reported a rise in output, this was supported by growth in new orders, which in turn was underpinned by improved underlying demand trends and new client wins.
The downturn in new export orders moderated during the period, thereby acting as a reduced drag on overall new order inflows.
Encouraged by sustained growth in new orders, Filipino manufacturers raised their purchases of additional raw materials and semi-finished items for the first time in four months. The pace of increase was marginal, however.
Renewed buying activity helped manufacturers across the Philippines to broadly maintain their inventories of inputs.
June data also highlighted signs of a recovery in supply chain disruption, with manufacturers signalling only a modest deterioration in vendor performance. Lead time lengthened to the least marked extent since December last year.
READ: PH manufacturing recovers in May 2026 with new orders
Filipino manufacturers also recorded unchanged staffing levels in June, marking a stabilisation compared to job shedding seen in April and May. In addition, outstanding business rose for the first time in three months as stronger new order inflows led firms to accumulate backlogs.
On the price front, inflationary pressures eased in June. Cost burdens increased at a rate which was the weakest in the current four-month sequence of rising expenses and was historically muted. However, where input prices did rise, S&P Global PMI survey panellists primarily linked this to greater raw material costs.
Similarly, output charges also rose at a softer pace in June. The pace of increase was moderate and slightly slower than the series average.
Nevertheless, the impact of previous hikes in costs on margins weighed on output growth forecasts for the year ahead.
Although companies remained optimistic on balance, citing hopes of improved demand, plans to introduce new products, increased marketing, and expansion into new markets, confidence levels fell to their lowest since January.
