The country’s manufacturing output contracted by 2.4 percent in February 2025, reversing some gains made in the preceding month and the comparable year-earlier period, the Philippine Statistics Authority (PSA) reported on Tuesday.
The comparative manufacturing output in January 2025 grew 2.3 percent and that in February 2024 rose 3.2 percent, the PSA said.
In the year-to-date, the volume of production index (VoPI), which measures the average change over time of the manufacturing section’s volume of production relative to a base period, has slipped by 0.1 percent, as shown by the results of the PSA’s latest Monthly Integrated Survey of Selected Industries.
The PSA said the downtrend in the year-on-year growth rate of VoPI for the month of February alone was found in the following sectors: manufacture of basic metals, with a 36.5 percent year-on-year drop from a 10.7 percent annual decline in January 2025; machinery and equipment except electrical, with a 27.9 percent yearly increase, which slowed down from a year-on-year hike of 60.6 percent in the previous month; and manufacture of chemicals and chemical products, with a 22.5 percent annual drop from a 3.5 percent year-on-year decrease in January 2025.
‘Seasonal slowdown’
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the softer manufacturing production volume still partly reflects the seasonal slowdown in demand and production activities upon crossing the new year.
Ricafort also cited the “cautious mode” amid US President Trump’s higher US import tariffs and other protectionist policies that could slow down world economic growth, especially in terms of slower global trade, investments, employment and other business activities.
The RCBC economist added that this could also reflect softer global trade conditions, especially amid mostly softer economic data in China, the world’s second-biggest economy and the major trading partner of the Philippines and other Asian countries.
VaPI downward reversals
Meanwhile, the Value of Production Index (VaPI) for the manufacturing section registered an annual decline of 1.6 percent in February from year-on-year increases of 3 percent in January 2025 and 1.8 percent in February 2024, the report said.
In the year-to-date, the VaPI, which measures the average change over time of the production value of the manufacturing section relative to a base period, has increased by 0.7 percent.
Last week, S&P Global said in its latest report that the Philippines’ manufacturing output deteriorated in March, falling below the neutral 50 level in the benchmark index for the first time in 19 months amid fresh contractions recorded in output and new orders.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index, which is a composite single-figure indicator of manufacturing performance, showed the country’s factory output falling to 49.4 in March, or below the benchmark for the first time since it slipped to 49.7 in August 2023. The index level above 50 indicates an expansion in manufacturing.
The index in March 2025 marked the third-straight month of decline, although not necessarily below 50, for the Philippines. For further comparison, the country’s manufacturing index in February already dipped from the preceding month to 51.
“Panelists noted that growing competition and fewer clients led to a reduction in new orders, with output scaled back as a result,” Maryam Baluch, economist at S&P Global Market Intelligence, said in the report.
“Growth in new export orders seen previously also dissipated, with March data signaling a marginal drop in new business from overseas,” Baluch said.
