PHL manufacturing in the doldrums

Factories in the Philippines showed laggard production in September,  as weaker demand and stronger international competition weighed on production and new orders.

This isn’t new, and in fact has been expected by many since the Philippine economy is now in a slippery downtrend.

S&P’s Global Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 49.6 from the near 10-year high of 54.9 in August, falling below the 50.0 threshold that separates expansion from contraction.  It was the first deterioration in manufacturing operating conditions since April 2026’s 48.3.

S&P said that the downturn was broad-based, with output, new orders, employment and input buying all returning to contraction territory.

“Filipino manufacturers reported a notable impact from high oil prices, strong international competition and weak demand during September,” said Sian Jones, principal economist at S&P Global Market Intelligence.

Production declined for the first time in nine months, with the pace of contraction said to be the sharpest since November 2025.

Firms attributed the reduction in output mainly to “reduced new order inflows and international competition.”

The decline in new orders came after four consecutive months of expansion. While the contraction in new sales was only marginal, it nevertheless represented a reversal from the improvement seen through the previous four months.

New export orders also returned to contraction in September, with manufacturers reporting that higher prices discouraged purchases amid strong competition.