Phl factory activity posts first decline since April
‘Filipino manufacturers reported a notable impact from high oil prices, strong international competition and weak demand during September.’
Text size
‘Filipino manufacturers reported a notable impact from high oil prices, strong international competition and weak demand during September.’
Philippine manufacturing activity contracted in September as weak demand, higher oil prices and stronger international competition pushed output, new orders and employment lower, according to the latest S&P Global Philippines Manufacturing Purchasing Managers’ Index.
The manufacturing PMI fell to 49.6 in September from 54.9 in August, slipping below the 50.0 mark that separates growth from contraction. It was the first deterioration in operating conditions since April and marked the sharpest decline in output since November 2025.
S&P Global said output, new orders, employment and input buying all returned to contraction territory during the month as manufacturers faced weak demand and pressure from international competition. Higher selling prices, following another increase in input costs, also weighed on customer demand.
“Filipino manufacturers reported a notable impact from high oil prices, strong international competition and weak demand during September,” said Siân Jones, principal economist at S&P Global Market Intelligence.
“Output, new orders and employment all dropped into contractionary territory,” Jones said, adding that firms also reduced input buying and inventories.
Production declined for the first time in nine months, with manufacturers attributing the drop to weaker new order inflows and international competition. New sales also fell at the end of the third quarter, breaking a four-month run of expansion. New export orders likewise returned to contraction as companies reported that higher prices discouraged purchases amid strong competition.
Manufacturers raised selling prices at a faster pace in September as they sought to pass higher costs on to customers. This came despite a softer increase in input costs, with firms citing higher operating expenses linked partly to unfavorable movements in the peso against the US dollar.
“Nonetheless, efforts to protect margins led to a sharper rise in selling prices,” Jones said. She noted that overall cost pressures increased at a slower pace despite higher oil prices.
The weaker demand environment also prompted manufacturers to cut input purchases for the first time since May. Both pre and post-production inventories declined, while the drop in post-production stocks was the fastest in five months.
Transportation delays and logistics problems linked to higher oil prices also worsened supplier performance. Lead times for inputs lengthened strongly, reaching one of the highest levels in almost two years.
Lower new orders reduced pressure on production capacity as backlogs declined in September. The contraction in backlogs was the fastest since April, while weaker production requirements triggered another round of job cuts, although the pace of job shedding remained slight.
Business confidence also weakened, with manufacturers less certain about the year-ahead outlook because of concerns over pricing power and competition from international producers. Optimism about future output fell sharply from August’s 21-month high and reached its weakest level since January.
“Manufacturing firms were less certain in the year-ahead outlook, meanwhile, due to concerns regarding pricing power against international competition,” Jones said.
The audit identified 366 PPE items below CoA’s P50,000 capitalization threshold, including 195 items assigned a nominal…
Two Lasallian campuses faced security threats Thursday, adding to a growing string of school scares that has continued…
Some couples regard a public marriage proposal as romantic. A pair in China decided to do it during the concert of a…
