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Louella Desiderio - The Philippine Star
August 2, 2025 | 12:00am
Photo shows workers at a clothing factory in Manila.
STAR / File
MANILA, Philippines — Philippine manufacturing activity continued to expand in July, posting its biggest improvement in three months, but growth in new orders and output remained subdued.
In a statement yesterday, S&P Global said that the Philippines’ manufacturing purchasing managers’ index (PMI) rose to 50.9 in July from 50.7 in June.
The July PMI is the highest reading since April’s 53.
Generated from a survey of around 400 manufacturers, the PMI covers the following: new orders, output, employment, suppliers’ delivery times and stocks of purchases.
A PMI reading above 50 means an expansion from the previous month, while below 50 indicates a contraction.
“While signaling further improvement across the Filipino manufacturing sector, PMI data from the opening month of the third quarter still painted a picture of a muted overall performance,” S&P Global Market Intelligence economist Maryam Baluch said.
She said both manufacturing output and new orders continued to increase, but the rates of expansion remained historically muted.
S&P Global said the manufacturing sector’s output increased partly due to the frontloading of orders from the US before the higher reciprocal tariff kicks in.
A 19-percent tariff was supposed to be imposed on Philippine exports to the US starting Aug. 1, following negotiations between the two countries.
An executive order issued by US President Donald Trump on July 31, however, moved the starting date for the new tariffs to Aug. 7.
Prior to negotiations last month, Trump said a 20-percent tariff would be levied on Philippine exports, higher than the 17 percent announced in April.
As Trump declared a pause on the tariffs unleashed in April to give time for negotiations with trade partners, a 10-percent tariff is currently being imposed on exports to the US coming from non-retaliatory countries like the Philippines.
Baluch said manufacturers’ purchasing activity and employment also rose at slower rates, reflecting firms’ cautious stance.
In terms of prices, she said inflationary pressures remained subdued, providing a silver lining to the sector.
She said optimism on future output also surged to a four-month high as firms anticipate improved demand.
“While challenges remain, growing positive sentiment hints at a more hopeful outlook for the sector,” Baluch said.
