The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) edged up to 50.1 in October 2025 from 49.9 in September, signaling broadly stable operating conditions for the sector after a slight deterioration the previous month.
The reading, which was slightly above the neutral 50.0 mark, masked underlying weaknesses in several key areas, particularly demand.
S&P Global Market Intelligence economist Maryam Baluch said that a closer examination of the data “revealed a mixed picture in October,” noting that the two largest segments, new orders and output, indicated further declines.
She also noted the “fresh contractions” in new export orders and purchasing activity, which “highlighted underlying demand conditions.”
Baluch cited positive developments, including manufacturers becoming more optimistic about their growth prospects and the continued increase in workforce numbers, which was the strongest in three months. Furthermore, she noted that subdued and ebbing cost pressures allowed several companies to reduce their selling prices.
The sector has remained in “sluggish territory for most of the second half of two thousand twenty-five so far,” Baluch said.
“Whether it can see a notable recovery in performance in the coming months will depend greatly on efforts to stimulate consumer demand,” she said.
New orders for manufactured goods dropped for a second consecutive month, with the rate of decline accelerating in October. Manufacturers pointed to sluggish demand and clients delaying orders. Compounding the issue, new export orders fell for the first time since May and at the steepest rate in a year, which companies attributed to weaker demand from international clients.
The continued fall in new orders resulted in production declining, although at a slower pace than in September. Reduced output requirements in turn prompted firms to scale back their purchasing activity for the first time in nearly two years, ending a twenty-two-month period of growth. Supplier delivery times also lengthened further, marking the worst delays in three months.
Employment rose again, with job creation at a three-month high. Backlogs of work declined for a second straight month, and business confidence improved, with manufacturers growing more optimistic about output prospects for the year ahead.
Cost pressures eased, as input price inflation slackened to a three-month low. This provided manufacturers with flexibility in pricing, leading selling prices to fall for the first time in nineteen months and at the fastest pace since April two thousand twenty, in an effort to stimulate demand.
