The Philippines' manufacturing sector showed a 10.2% growth in May, indicating a slowdown from the previous month's accelerated pace. This change reflects a normalization in activity levels, with analysts emphasizing stable demand.
Manufacturing Output and Economic Indicators
I would characterize this as a normalization after a strong April rather than the beginning of a slowdown. The underlying trend remains positive.
Jonathan L. Ravelas, Senior Adviser, Reyes Tacandong & Co.
- Manufacturing output grew 10.2% year-on-year in May.
- April's growth was revised to an impressive 11.7%.
- Capacity utilization averaged 78.8% in May.
Data from the Philippine Statistics Authority (PSA) revealed that May's growth followed a revised 0.3% decline in May 2025. Despite the decrease, the growth rate remains strong compared to the 3.5% recorded in February.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in May, up from 48.3 in April. This index, which reflects future manufacturing activity through raw material orders, signals expansion when above 50.
Notably, while some sectors like transport equipment, food products, and chemicals experienced declines, others like petroleum products, electronics, and basic metals showed resilience, supporting overall growth.
The PSA highlighted that chemicals and chemical products saw a significant contraction of 14.8% in May, while food manufacturing slowed due to lower outputs in dairy and processed meat sectors.
As the economy looks forward, experts anticipate that manufacturing will benefit from robust domestic demand and an improving external environment, despite potential global trade challenges.
The manufacturing PMI further improved to 50.9 in June, reflecting ongoing growth in output and new orders, suggesting a favorable outlook for the sector.