The Philippines’ manufacturing output contracted by 0.2 percent in March, data from the Philippine Statistics Authority (PSA) showed, marking an easing of the contraction seen in the first two months of the year.
Results of the PSA’s latest Monthly Integrated Survey of Selected Industries released on Wednesday showed that while factory output inched down in March, it was at a slower pace than the 5.1 percent drop recorded a year earlier and the 1.5 percent decline in February 2025.
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, still saw a 0.2 percent year-on-year increase.
Analyst sees weak global demand
“While the pace of contraction slowed, the continued decline suggests lingering weakness in global demand, particularly electronics exports; high input and energy costs, although easing inflation may soon bring relief; uncertainty from US tariff shifts and regional supply chain disruptions that affect producer confidence,” John Paolo Rivera, a
senior research fellow at the Philippine Institute for Development Studies, said.
Rivera said that for a sustained rebound, the manufacturing sector needs to modernize, make the supply chain resilient, and policies stable, especially around trade and energy.
Production by value
Meanwhile, the Value of Production Index (VaPI) for the manufacturing section firmed by 0.4 percent in March from year-on-year contractions of 0.6 percent in February 2025 and 6.2 percent in March 2024, the PSA said.
Since January 2025, the VaPI, which measures the average change over time of the production value of the manufacturing section, increased by 0.9 percent.
Based on responding establishments, the average capacity utilization rate for the manufacturing sector in March 2025 was recorded at 76.2 percent from 75.9 percent average in the previous month.
In March 2024, the average capacity utilization rate was tallied at 74.8 percent.
Last Friday, S&P Global said in its latest report that the headline Philippines manufacturing purchasing managers’ index, a composite single-figure indicator of manufacturing performance, stood at 53 in April, which was above the neutral 50 level, indicating a renewed improvement in the health of the Filipino manufacturing sector.
This improved from March’s reading of 49.4, which was the lowest for 43 months and indicated a modest deterioration in operating conditions.
“The Filipino manufacturing sector commenced the second quarter of the year on a solid note, experiencing renewed growth in output and new orders, alongside an increased level of purchasing activity. Encouragingly, inflationary pressures also remained contained and historically subdued,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
“However, Baluch pointed out that companies have shown caution in expanding their workforce numbers, and that confidence within the sector has declined to its second-lowest in the series history.
