Philippine manufacturing is poised for sustained growth in 2026, supported by stabilizing domestic demand, potential export gains and industrial reforms, following a December 2025 rebound in the purchasing manager’s index (PMI), the Federation of Philippine Industries (FPI) said Monday.
The S&P earlier reported that the Philippines’ PMI rebounded to 50.2 percent in November from October’s four-year low of 47.4 percent. An index above 50.0 percent indicates expansion.
“The PMI shows we are back in positive territory, a clear sign of resilience. The challenge and opportunity now is to turn this recovery into lasting industrial strength by investing in innovation, diversification and resilience,” said FPI chairwoman Elizabeth Lee.
Lee said the rebound was led by several factors including the normalized operations after November’s typhoon disruptions, which had sharply curtailed production and deliveries.
New orders also rose for the first time since August, ending a three-month contraction and signaling stronger domestic demand, while firms also cautiously resumed purchasing activity, anticipating future output growth despite ongoing supply chain challenges.
FPI, the main umbrella organization for manufacturers, representing diverse sectors like food, construction materials, chemicals and electronics, said the recovery was largely domestic-led, as export orders remained subdued at the end of 2025.
The group said analysts anticipated that sustaining growth in 2026 would require greater resilience to climate and supply chain shocks, diversification beyond food processing and electronics and expansion into mid-complexity industries such as machinery, chemicals and wood products.
Export momentum, particularly in electronics, could further boost manufacturing activity, Lee said.
She said with the sector contributing 15.7 percent of the gross domestic product, below the ASEAN average of 22 percent to 27 percent, initiatives like Tatak Pinoy, the Philippines’ industrial strategy under Republic Act 11981, are key to deepening capacity, enhancing competitiveness, and ensuring growth is inclusive and durable
“December’s rebound shows the sector can recover quickly when demand stabilizes. With strategic reforms, 2026 could mark a new phase of resilient, globally competitive manufacturing,” Lee said.
