The Philippine manufacturing index rose for the third straight month in August 2025, but the sector’s overall performance remained subdued compared to historical standards, S&P Global Market Intelligence said Monday.
The headline S&P Global Philippines Manufacturing PMI — a single-figure indicator of manufacturing performance — was 50.8 in August, a slight decrease from 50.9 in July. The figure indicated a marginal improvement in the health of the Filipino manufacturing sector, but one that was historically weak.
“The latest PMI data for the Philippines manufacturing sector once again indicated a subdued performance, with growth rates for output and new orders remaining below their historical averages,” said Maryam Baluch, an economist at S&P Global Market Intelligence.
“Furthermore, while overall sentiment in the year-ahead outlook remained optimistic and even strengthened compared to the previous month, confidence fell short of the long-run average,” said Baluch.
Baluch said job creation halted in August, ending a two-month period of marginal increases. “However, subdued cost pressures, coupled with manufacturers’ efforts to control their pricing in a bid to remain competitive, could provide the boost firms need to regain sales momentum,” she said.
Firms were more optimistic about the outlook for production over the next year, with confidence hitting a nine-month high, although the index continued to fall short of its survey average.
The sustained rise in new business supported the upturn in output. The growth rate was consistent with that of July, with anecdotal evidence pointing to new customer acquisitions and improved demand. Foreign demand also strengthened, with the growth rate quickening to a seven-month high. The increase in production prompted firms to purchase inputs at the fastest pace in four months.
However, manufacturing employment was stable in August, ending two months of job growth. This, combined with rising production, led to a build-up of work backlogs at the fastest rate in six months.
To fulfill new orders, manufacturers drew down their post-production inventories, leading to a modest decline in finished goods stocks. Reductions have been noted in three of the last four survey periods, with some firms reporting that they released stock to mitigate potential damage from heavy rainfall.
Inflationary pressures remained relatively subdued. Cost burdens increased at a faster pace in August, which manufacturers attributed to higher material prices. Firms tried to pass on these costs to customers through increased charges, but many chose to remain competitive, resulting in the slowest pace of selling price inflation in four months.
Companies across the Philippines were more confident about the year-ahead outlook for output in August. The index rose for the fourth consecutive month to its highest point since November 2024. While firms were hopeful that demand would improve and support production, positive sentiment remained subdued compared to the long-term series average.
