Factory activity slips to 4-year low in November

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December 2, 2025 | 12:00am

MANILA, Philippines — Philippine manufacturing activity slid into contraction mode in November, falling to its lowest level in over four years, due to weak demand.

In a statement yesterday, S&P Global said that the Philippine manufacturing purchasing managers’ index (PMI) – a barometer of manufacturing activity – stood at 47.4 in November, down from the previous month’s 50.1.

S&P Global said the latest PMI reading is the “strongest deterioration in operating conditions across the Filipino manufacturing sector since August 2021.”

Derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases, the PMI is a measure of manufacturing performance.

An above 50 PMI reading indicates an overall increase compared to the previous month, while below 50 indicates a decline.

“Manufacturing conditions in the Philippines deteriorated sharply in November, according to the latest S&P Global PMI survey. Output and new orders contracted at their fastest rates since August 2021, driven by weak customer demand,” S&P Global Market Intelligence economics director Trevor Balchin said.

Manufacturers received lower orders amid tepid customer demand and reduced requirements due to product life cycle changes.

As new orders dropped, production followed suit.

Typhoons that hit the country also caused disruptions to manufacturing activities.

Balchin said exports, purchasing and employment in the manufacturing sector also saw declines, reflecting broader challenges.

Manufacturers’ purchasing activity declined for the second month due to lower orders.

The decline in new orders also prompted manufacturers to reduce their headcount for the first time since May this year.

Manufacturers’ backlogs rose for the first time in three months, while stocks of finished goods were depleted at the fastest rate in nearly a year.

Asked to comment on the PMI result, Department of Economy, Planning and Development Secretary Arsenio Balisacan said in a press conference yesterday that the cost of doing business and quality of infrastructure in the country have long posed challenges to industries including manufacturing.

With the recent flood control controversy, he said the government now faces another challenge in the form of improving not just the quality of infrastructure, but also the quality of spending.

“We must ensure that projects [and] programs that we are prioritizing get funding,” he said.

He said the government also needs to address other constraints to encourage investments in the sector.

Despite deteriorating operating conditions, manufacturers in the country are optimistic of seeing higher output in the next 12 months.

Balchin said Philippine manufacturers expect growth due to new projects and improved economic conditions.

“Overall, while the manufacturing sector faces immediate challenges, the outlook suggests cautious optimism for growth moving forward,” he said.