PH Manufacturing Dips for First Time in 19 Months, but Outlook Remains Hopeful

The Philippine manufacturing sector saw its first contraction in over a year and a half last March, according to S&P Global’s latest report—but optimism for the rest of the year remains strong.

The country’s Manufacturing Purchasing Managers’ Index (PMI) dropped to 49.4 in March from 51.0 in February, marking the first time since August 2021 that the PMI fell below the crucial 50-point mark that separates growth from contraction.

S&P Global economist Maryam Baluch said the downturn reflects growing market competition and a decline in client demand, which led to reduced new orders and scaled-back output. This also ended an 11-month streak of output growth, with new sales and foreign demand both taking a hit.

While hiring was put on hold—citing sufficient staffing and reduced backlogs—companies showed confidence in future demand, maintaining their purchasing levels and building up inventory in anticipation of a market rebound.

“Despite current setbacks, confidence among firms is at a four-month high, with businesses hopeful about new projects and potential client wins,” Baluch noted.

Inflation pressures also remained mild, helping keep input costs stable as manufacturers navigate this period of slower activity.

The Philippine Statistics Authority will release the official March manufacturing data on May 7, 2025.