WHILE output and new orders recorded further declines in October, business confidence among Philippine manufacturers has improved as they continued to expand their workforce, according to the S and P Global Market Intelligence.
This developed as S and P Global noted that the country’s Purchasing Managers’ Index (PMI) score slightly rose to 50.1 in October from the 49.9 in September.
‘October data saw the S and P Global Philippines Manufacturing PMI post slightly above the neutral mark of 50.0, signaling broadly stable operating conditions, and reversed the slight deterioration seen in the month prior,’ S and P Global said.
Closely examining the Philippines’s PMI data, Maryam Baluch, Economist at S and P Global Market Intelligence, pointed out that the Philippine manufacturing sector in October revealed a ‘mixed picture.’
Baluch said the two largest segments, new orders and output, indicated ‘further declines,’ adding that fresh contractions were observed in new export orders and purchasing activity, highlighting underlying demand conditions.
S and P Global explained that the recent decline in output was ‘closely associated’ with falling new orders, which panelists linked to ‘adverse weather conditions and the end-of-life status for certain products.’
Nevertheless, it noted that the rate of contraction in production slowed during the month, and was only ‘marginal.’
Meanwhile, S and P Global said new factory orders placed with manufacturing firms in the Philippines ‘fell at a stronger rate’ in October.
Surveyed panelists often attributed this decline to a ‘sluggish’ demand climate, with clients often putting orders on hold.
In addition, S and P Global said new export orders fell for the first time since May and at a ‘solid pace,’ which it said was the ‘most pronounced’ for a year.
‘Companies reported weaker demand from international clients,’ S and P Global noted.
On a more positive note, Baluch said: ‘Manufacturers grew more optimistic about their growth prospects for output in the coming year.’
S and P Global said positive sentiment was close to the recent high observed back in August. With this, it noted that panelists are hopeful that production will bounce back, supported by strengthening demand trends.
Meanwhile, Baluch noted that companies continued increasing their workforce numbers, with the latest rise in staffing numbers the strongest in three months.
‘Furthermore, cost pressures remain subdued and ebbed further, providing manufacturers with some flexibility in price setting,’ said Baluch.
In response, the economist said several have opted to reduce their selling prices, in an effort to stimulate demand in a currently subdued market environment.
Baluch said the sector has now remained in ‘sluggish territory’ for most of the second half of 2025 so far.
‘Whether it can see a notable recovery in performance in the coming months will depend greatly on efforts to stimulate consumer demand,’ the S and P Global Market Intelligence economist noted.
In July, the Philippines’ PMI was at 50.9, which slightly dipped to 50.8 in August then slipped into negative territory in September at 49.9. In October, the manufacturing sector slightly picked up as it posted a 50.1 PMI score.